On July 23, a significant development in the world of cryptocurrency is set to take place in Hong Kong. The launch of Asia’s first Bitcoin futures inverse product, the CSOP Bitcoin Futures Daily (-1x) Inverse Product (7376.HK), by China Southern Asset Management Co., Ltd (CSOP) is creating quite a buzz in the investment community.
This new exchange-traded fund (ETF) is specifically designed to allow investors to capitalize on the decline in Bitcoin’s price. With an initial price of around 7.8 Hong Kong dollars (HKD) per unit, the CSOP Bitcoin Futures Daily (-1x) Inverse Product will be listed on the Hong Kong Stock Exchange (HKEX). Its main goal is to closely mirror the inverse daily performance of the S&P Bitcoin Futures Index through a futures-based replication strategy that involves direct investments in spot-month Bitcoin futures traded on the Chicago Mercantile Exchange (CME).
Ms. Ding Chen, the CEO of CSOP Asset Management, expressed her excitement about this new product, stating, “As an ETF issuer esteemed by investors in the APAC region, CSOP has always aimed to offer comprehensive and diversified investment products. We are currently the leading provider of Leveraged and Inverse products in Hong Kong, with a market share of 99%.” She highlighted how this innovative product will provide investors with the opportunity to profit from Bitcoin’s value decline.
This launch comes at a crucial time for Bitcoin investors, who have experienced significant volatility in the cryptocurrency market. In early July, Bitcoin’s value dropped below $54,000 before bouncing back, fueled by positive sentiments towards cryptocurrencies, including speculation about former President Donald Trump’s potential involvement in the industry.
The introduction of the CSOP Bitcoin Futures Daily (-1x) Inverse Product is part of CSOP’s broader expansion strategy in the Asia-Pacific region. Following the successful launch of the CSOP Bitcoin Futures ETF (3066.HK) in December 2022, which was one of the first crypto-linked ETFs in the region, this new product further solidifies CSOP’s presence in the market.
In recent years, the Hong Kong Stock Exchange (HKEX) has seen a growing interest in spot crypto ETFs, starting with CSOP’s Bitcoin Futures ETF and Ether Futures ETF. These products track Bitcoin futures and Ether futures cash-settled contracts traded on the CME. Samsung Asset Management Hong Kong also entered the market in January 2023 with a Bitcoin futures ETF, contributing to the overall growth of crypto ETFs in the region.
The popularity of inverse crypto exchange-traded products is on the rise globally, with approximately $106 million in assets invested in these products so far. The largest of these products, the Short Bitcoin Strategy ETF from ProShares Advisors LLC, has amassed $62.5 million in assets, charging a 1.33% management fee.
In Hong Kong alone, the total assets held by the six Bitcoin and Ether ETFs currently amount to $362 million. Meanwhile, the spot Bitcoin ETFs launched in the U.S. in January have attracted a whopping $60.7 billion in assets, indicating the growing interest in cryptocurrency investments worldwide.