The Securities and Exchange Commission (SEC) of Thailand has officially announced bitcoin-etf” target=”_blank” rel=”noopener nofollow”>approved One Asset Management (ONEAM) will launch the country's first spot bitcoin exchange-traded fund (ETF), a landmark move in the country's financial sector. This ETF will be available exclusively to institutional and wealthy investors, reflecting a cautious regulatory stance toward retail investor participation.
Thailand continues wave of bitcoin spot ETF approval
The approved fund will be distributed from May 31 to June 6, with an assigned investment risk level of eight, indicating a high-risk profile. The ONE bitcoin ETF will allocate its assets across 11 globally leading btc funds to ensure liquidity and security.
These underlying funds have been vetted by regulatory agencies in the United States and Hong Kong. “Digital assets are an alternative asset that has low correlation with other financial assets. They are suitable to help investors diversify investment risks,” said Pote Harinasuta, CEO of ONEAM.
This approval follows a trend seen globally, with the US SEC and the Hong Kong Securities and Futures Commission recently endorsing btc spot ETFs. These international endorsements likely influenced Thailand's SEC, highlighting the growing acceptance of bitcoin ETFs as a mainstream investment option.
bitcoin's market cap stands at $1.4 trillion, compared to gold's $14 trillion, indicating substantial growth potential given btc's finite supply of 21 million coins. “Although the supply of bitcoin is limited to 21 million, demand is increasing as it gains popularity. “We see high growth potential for bitcoin,” said Harinasuta.
Over the past 11 years, btc has demonstrated an average annual return of 124%, with an average volatility of 83% annually. “Investing in bitcoin can offer good returns, but comes with high volatility,” Harinasuta emphasized.
ONEAM advises investors to allocate up to 5% of their portfolios to btc. This strategy is expected to produce an average return of 8.90% annually with a Sharpe ratio of 0.71 and a maximum drawdown of -22.4%. Comparatively, a portfolio without btc would produce an average return of 5.80% annually, with a Sharpe ratio of 0.48 and a maximum drawdown of -20.4%.
A key feature of the ONE bitcoin ETF is its focus on coin storage security. Harinasuta highlighted the importance of secure storage, citing historical issues with data loss and theft in direct btc investments.
“Investing in bitcoin directly through various platforms carries risks, and past problems include data loss or theft of digital assets through the online system,” he explained. The ETF mitigates these risks by using custodians that meet institutional standards, ensuring coins are stored offline and offering high security.
The Thai SEC approval responds to growing demand from local institutions for regulated btc investment options. This move aligns Thailand with other jurisdictions such as the United States, Hong Kong, Australia and the United Kingdom, which adopted regulated investment vehicles in bitcoin earlier this year.
While ONEAM has secured its position as the first to offer a spot ETF, MFC Asset Management is still awaiting regulatory approval for its own ETF. The competitive landscape in Thailand's emerging bitcoin spot ETF market will be closely watched as more companies look to take advantage of growing institutional interest in digital assets.
At the time of publication, btc was trading at $69,045.
Featured image created with DALL·E, chart from TradingView.com
