On July 23, Hong Kong will mark an important milestone in the field of crypto financial products by tech/blockchain/article/3271396/hong-kong-get-first-bitcoin-inverse-investment-product-adding-crypto-etfs” target=”_blank” rel=”noopener nofollow”>Introducing Asia's first inverse bitcoin exchange-traded fund (ETF), according to local media outlet South China Morning Post.
According to the report, the CSOP bitcoin Futures Daily (-1x) inverse product would be officially registered at 7376. CSOP Asset Management manages the symbol HK.
Furthermore, the product is designed to allow investors to profit from declines in bitcoin prices. Notably, the inverse ETF marks a growing and maturing market where investors are looking for various innovative ways to diversify within the cryptocurrency market.
How will Asia's first inverse bitcoin ETF work?
Behind the upcoming bitcoin inverse product is CSOP Asset Management, a leading asset manager in China that has pioneered cryptocurrency-related financial products.
Following the successful launch of the CSOP bitcoin Futures ETF on December 22, 2022, with the registered symbol 3066.HK, this new inverse ETF to be launched is part of its effort to expand its market shares in the growing and developing markets of Asia-Pacific.
According to the report, the CSOP bitcoin Futures Daily (-1x) inverse product will attempt to achieve the inverse of investment results that mirror the daily performance of the S&P bitcoin Futures Index.
This is achieved through a futures-based replication strategy that includes taking short positions in bitcoin futures contracts expiring in cash on the Chicago Mercantile Exchange.
As such, the product is designed to target declines in the price of bitcoin, allowing investors to strategically enter the market with options that will help them capitalize on the cryptocurrency’s decline.
The product, which is scheduled to be listed on the Hong Kong Stock Exchange at a price of approximately HK$7.8 per unit, is primarily designed for a segment of investors looking for more sophisticated ways to invest in the cryptocurrency market. However, such a product carries high investment risks.
For example, CSOP has warned of the possibility of extreme price volatility, which could lead to substantial investment losses, emphasizing that values could fall by more than 20% in a single day.
Hong Kong's Deepest Integration with Cryptocurrencies
It is worth noting that this development comes as Hong Kong moves forward with cryptocurrency integration as a nation.
Last week, the country’s largest virtual bank, ZA Bank, announced that it would begin offering reserve banking services to stablecoin issuers in Hong Kong.
The announcement came as Hong Kong launched a stablecoin licensing regime requiring stablecoin operators in the region to deposit reserve assets in local banks.
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