- Hong Kong introduces Asia’s first inverse Bitcoin ETF.
- This ETF allows investors to benefit from the volatility of BTC.
The crypto world is buzzing as Hong Kong unveils Asia’s first inverse BTC ETFs. As reported by local media, the inverse BTC ETFs will begin trading on July 23.
As reported by Chinese science via their X page (formerly Twitter),
“Asia’s first inverse bitcoin ETF, which allows investors to bet on a decline in the cryptocurrency, will debut on the Hong Kong stock exchange on Tuesday.”
Asia’s first inverse BTC ETF
The expected fund, CSOP Bitcoin Futures Daily (-1x) Inverse product, will be listed on the Hong Kong Stock Exchange. The Inverse BTC ETFs differ from the traditional ETFS.
Unlike the usual BTC ETFs, the fund offers investors the opportunity to bet against the market. Therefore, traders can take advantage of the BTC price drop.
Since the introduction of Bitcoin ETFs, the coin has experienced high volatility, from a high of $73,000 to less than $60,000. For example, at the time of writing, BTC has an annualized volatility of 48.56%.
Therefore, the ETF expects to be able to take advantage of this volatility.
Source: Het Blok
The ETF targets yield profits opposite to those of the daily S&P BTC futures index. Furthermore, it will replicate the targeted performance using a forward-looking shorting approach.
Investors will enter into BTC futures contracts that expire after one month. Thus, the Fund helps investors predict and determine the timing of the BTC market by providing options to profit from price declines.
Broadly speaking, the exchange-traded fund is set at HK$7.8 and is specifically tailored for investors who prefer more control over their portfolios.
Read Bitcoin’s [BTC] Price forecast 2024-25
Implications for investors
Notably, the inverse ETF offers investors who are wary of BTC due to market volatility an opportunity to manage their risks. Likewise, the fund offers investors a new way to profit from bearish market conditions.
However, CSOP warned investors that such investments could plummet by more than 20% in a single day, leading to significant losses.