Bitcoin spot ETF approved in Thailand

The Thai Securities and Exchange Commission (SEC) has approved the first Bitcoin spot ETF in Thailand. The investment product from financial services provider One Asset Management, which manages around USD 3.5 billion for clients, is already in the distribution process.

The Bitcoin ETF from One Asset Management (ONEAM) is the first Bitcoin spot ETF to be approved in Thailand. However, only institutional and very wealthy investors are allowed to buy the investment product, which has the highest possible risk rating of 8. According to the Bangkok Post, the ETF will be initially issued in the period from May 31 to June 6.

The new Bitcoin spot ETF is also said to have been reviewed by regulators in the USA and Hong Kong and to hold Bitcoin in custody in accordance with international standards. Meanwhile, asset manager MFC Asset Management is still awaiting approval from the Thai SEC for another Bitcoin ETF, which will also not be available to retail investors.

Pote Harinasuta, the CEO of ONEAM, expressed his confidence in the asset class to the Bangkok Post.

Although the supply of Bitcoin is limited at 21 million, demand is growing as it becomes more popular. We see high growth potential for Bitcoin.
Pote_Harinasuta

Harinasuta emphasized the advantages that Bitcoin can bring to a diversified portfolio.

Digital assets are an alternative form of investment that has a low correlation with other financial assets. They are suitable for helping investors to diversify investment risks.
Pote Harinasuta

The ONEAM CEO showed the Bangkok Post that the risk-adjusted return of a portfolio with a bitcoin allocation is higher. This means that although a Bitcoin allocation slightly increases the volatility of the portfolio, the stronger performance more than makes up for it. Accordingly, ONEAM recommends a position size of 5 percent in Bitcoin for institutional investors - the disadvantage, which according to him does not justify a higher allocation, is the high volatility of the asset.

After the US Securities and Exchange Commission (SEC) approved Bitcoin spot ETFs on the world's most relevant capital market in January of this year, the ball started rolling. At the time, some market observers were already predicting that Bitcoin spot ETFs would now also become tradable in other jurisdictions - and they were proved right.

Bitcoin spot ETFs made their trading debut on the Hong Kong Stock Exchange at the end of April and today saw the start of trading of a Bitcoin spot ETF in Australia, which according to the asset manager is the first on an Australian stock exchange to hold Bitcoin directly. Last week, ETNs backed by Bitcoin were also launched on the London Stock Exchange. Bitcoin spot ETFs could also soon be given the green light in South Korea after the Minju party won the parliamentary election, for which it campaigned by approving the investment products.

While the Bitcoin spot ETFs in the US exceeded all expectations and boosted the Bitcoin price, the approvals on smaller exchanges such as the Hong Kong Stock Exchange proved to be less of a price driver. Ultimately, the US capital markets are and will remain by far the most relevant in terms of Bitcoin's price performance. Nevertheless, the fact that more and more institutional investors around the world are able to invest in the 15-year-old asset via the structures they are familiar with is certainly conducive to the broader adoption of Bitcoin.

Thailand ranks tenth in Chainalysis' Crypto Adoption Index. According to Statista, more than 13 million of Thailand's 72 million inhabitants are users of cryptocurrencies as of 2023. The fact that retail investors are not allowed to invest in the new Bitcoin spot ETF is probably acceptable due to the already high level of adoption among private individuals, who do not necessarily need a regulated investment product to invest in the asset class.