Thailand has taken its first steps into the world of Bitcoin with the launch of a unique exchange-traded fund (ETF) aimed at high-net-worth individuals and institutions. It comes amid a surge in global interest in cryptocurrencies, but with Thai regulators taking a cautious approach, prioritizing security and controlled access for beginners.
Limited access for a privileged few
The Securities and Exchange Commission (SEC) has given the green light to A Bitcoin ETF Fund of uncovered funds, offered by One Asset Management (ONEAM), announced Tuesday the daily Bangkok Post, headquartered in Thailand. Unlike traditional ETFs available to the general public, this one comes with a high barrier to entry.
Only accredited investors, a category encompassing institutions and high-net-worth individuals, can participate. This restricted access reflects a common theme in Asia, where regulators are taking a measured approach towards Bitcoin. While China has cracked down hard, others like South Korea and Japan have implemented stricter know-your-customer (KYC) regulations and listing requirements for crypto exchanges.
Safety First: Bitcoin Wrapped in a Safety Net
THE ONEAM ETF offers a twist on the typical investment model. Instead of directly holding the top cryptocurrencies, the fund invests in a basket of 11 well-established global Bitcoin funds. This “fund of funds” structure aims to mitigate risks associated with individual trading platforms, which have faced issues such as data breaches and stolen digital assets in the past.
BTCUSD trading at $68,940 on the 24-hour chart: TradingView.com
Additionally, the ETF emphasizes secure storage practices, employing international standards and custodians used by institutional investors. These depositories store Bitcoin offline, significantly reducing vulnerability to online attacks.
A game of diversification
For qualified investors, the appeal of Bitcoin lies in its potential to diversify their portfolios. The coin’s price movements tend to have a low correlation with traditional assets like stocks and bonds. This means that including a small allocation of BTC can help reduce overall portfolio volatility.
Despite its potential advantages, SECOND recognizes the risks inherent in investing in crypto. The history of Bitcoin is marked by high volatility, with significant price fluctuations. To manage this risk, ONEAM recommends a cautious approach, suggesting investors allocate only 5% of their portfolio to Bitcoin.
A measured step forward for Thailand
Thailand’s foray into Bitcoin ETF represents a calculated decision by regulators. It recognizes the growing interest in cryptocurrencies, but prioritizes protecting less sophisticated investors. Limited access and emphasis on secure storage reflect this cautious approach.
This contrasts with some other Asian markets, such as Hong Kong, which recently approved ETFs that invest directly in Bitcoin and Ethereum, potentially opening the doors to a wider range of investors.
Featured image of Pastel, chart from TradingView
