Hong Kong Launches Its First Inverse Bitcoin ETF Product

CSOP Asset Management, a regulated asset management company, has become the first to launch an inverse Bitcoin ETF in Hong Kong’s markets. This allows traders and investors to speculate on the decline of the cryptocurrency’s value. The product complements other ETF products already available, further establishing the city as an international crypto market.

CSOP Asset Management Pioneers Inverse Bitcoin ETF in Hong Kong

Many cryptocurrency products are appearing in Hong Kong, a city pushing to become an international cryptocurrency hub. CSOP Asset Management, part of a Hong Kong established joint venture between China Southern Asset Management, one of the largest companies of its kind in the mainland, and Oriental Patron, recently announced the launch of the first inverse bitcoin exchange-traded fund (ETF) in that market.

An inverse ETF allows investors to capitalize on the negative performance of any asset, in this case, bitcoin. CSOP’s product is called the CSOP Bitcoin Futures Daily (-1x) and started trading this Tuesday on Hong Kong markets. While most analysts have predicted that bitcoin will have a bullish future after the failed assassination attempt of former U.S. President Donald Trump and U.S. President Joe Biden dropping the reelection bid, bitcoin price will probably fall in some periods.

Even with this forecast, CSOP Asset Management CEO Ding Chen expects these products to garner inflows from $50 to $100 million in the next two years. Nonetheless, Chan warned that investors need to control the risk associated with a position of an inverted bitcoin ETF or take another position countering this one, even when the instruments in Hong Kong make this difficult. Chen stated that CSOP was also working to launch an inverse ETH ETF.

CSOP’s offering joins other ETFs launched in Hong Kong since April that have received inflows of $362 million, a relatively small number compared to the $60 billion raised by their U.S.-based counterparts. Nonetheless, the former allows investors to swap crypto assets for ETF participation directly, which is different from how the latter operates.

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