Profit from the Dip: Hong Kong To Debut Asia’s First Inverse Bitcoin ETF — Here’s When

On July 23, Hong Kong will mark a significant milestone in the crypto financial product domain by introducing Asia’s first inverse Bitcoin exchange-traded fund (ETF), according to a local media outlet, South China Morning Post.

According to the report, the CSOP Bitcoin Futures Daily (-1x) Inverse Product would be officially registered with 7376. The CSOP Asset Management manages the HK symbol.

In addition, the product is designed to enable investors to profit from falls in the prices of Bitcoin. Notably, the inverse ETF marks a growing and maturing market where investors pursue various innovative ways to diversify within the crypto market.

How is the Asia’s First Inverse Bitcoin ETF Going To Operate?

Behind the upcoming Bitcoin inverse product is CSOP Asset Management, a leading asset manager in China that has been pioneering cryptocurrency-related financial products.

Following the successful launch of the CSOP Bitcoin Futures ETF on December 22, 2022, with a registered symbol of 3066.HK, this new inverse ETF set to launch, is part of their effort to expand their market shares into the growing and developing Asia-Pacific markets.

According to the report, the CSOP Bitcoin Futures Daily (-1x) Inverse Product will endeavor to achieve the inverse of the investment results that mirror the daily S&P Bitcoin Futures Index performance.

This is accomplished through a futures-based replication strategy that includes taking short positions in spot-month Bitcoin futures contracts on the Chicago Mercantile Exchange.

As such, the product is established to target decreases in the price of Bitcoin, enabling investors to strategically enter the market with options that will help them capitalize on the fall of the cryptocurrency.

Scheduled to list on the Hong Kong Stock Exchange at roughly 7.8 Hong Kong dollars per unit, the product is primarily designed for a segment of investors looking for more sophisticated ways to invest in the cryptocurrency market. However, with such a product comes high investment risks.

For instance, CSOP has warned about the potential for extreme price volatility, which could lead to substantial investment losses, emphasizing that values could plummet by more than 20% in a single day.

Hong Kong’s Further Integration With Crypto

It is worth noting that this development comes when Hong Kong moves further into integrating with crypto as a nation.

Just last week, the largest virtual bank in the country, ZA Bank, announced that it would start offering reserve bank services to stablecoin issuers in Hong Kong.

The announcement came when Hong Kong launched a stablecoin licensing regime that mandated crypto stablecoin operators in the region to deposit reserve assets with local banks.

Featured image created with DALL-E, Chart from TradingView