Tomorrow, the Hong Kong Stock Exchange (HKEX) will be launching Asia’s first inverse Bitcoin exchange-traded fund (ETF).
This new ETF, the CSOP Bitcoin Futures Daily (-1x) Inverse Product, is designed to let traders profit from Bitcoin price drops without directly shorting the asset.
The ETF will focus on short positions in Bitcoin futures contracts traded on the Chicago Mercantile Exchange (CME). If Bitcoin’s price drops, the ETF’s value goes up.
Traders can use this new ETF to hedge against BTC’s price drops or speculate on its decline. Unlike shorting Bitcoin directly or buying put options, this ETF offers another way to bet against BTC.
HSBC is the ETF’s trustee. The fund charges a 1.99% annual fee and aims to attract $50-100 million in assets within the next one to two years. Inverse Bitcoin ETFs are getting more and more popular globally.
The ProShares Short Bitcoin ETF (BITI) in the U.S. already has over $70 million in assets under management. Now, the CSOP’s product will be the first of its kind in Asia, introducing inverse BTC exposure to Hong Kong’s $5.4 trillion stock market.
This product is entering a market that has already seen some activity with spot Bitcoin ETFs that started trading a few months ago. The first batch began trading on April 30, though the initial performance was described as “lukewarm.”
This means the market’s reaction wasn’t overwhelmingly positive, but it wasn’t negative either. BTC has been on a rollercoaster recently, partly due to political events in the U.S.
The cryptocurrency saw a rise following increased speculation that Donald Trump might regain the White House, and was trading above $68,000 after Joe Biden announced his decision to quit the presidential race.
Cryptopolitan Academy: Are You Making These Web3 Resume Mistakes? - Find Out Here
