Hong Kong debuts Asia’s first inverse Bitcoin ETFs: Time to bet on bears?
Hong Kong debuts Asia's first inverse Bitcoin ETF, offering a chance to profit on BTC's price drops.
- Hong Kong debuts Asia’s first inverse Bitcoin ETF.
- This ETF allows investors to profit from BTC’s volatility.
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 start trading on the 23rd of July.
As reported by China Science through their X (formerly Twitter) page,
“Asia’s first inverse bitcoin ETF, which allows investors to bet on a fall in the cryptocurrency, is set to debut on Hong Kong’s stock exchange on Tuesday.”
Asia’s first inverse BTC ETF
The anticipated fund, CSOP Bitcoin Futures Daily (-1x) Inverse product, will be listed on the Hong Kong Stock Exchange. The Inverse BTC ETFs are different from the traditional ETFS.
Unlike the usual BTC ETFs, the fund allows investors to bet against the market. Therefore, it allows traders to profit from BTC’s decline in prices.
Since the introduction of Bitcoin ETFs, the coin has experienced high volatility, from a high of $73k to below $60k. For instance, as of this writing, BTC has an annualized volatility of 48.56%.
Therefore, this volatility is what the ETF expects to leverage.
The ETF targets deliver profits opposite of the daily S&P BTC futures index. Additionally, it will replicate the target performance using a future-based approach that involves entering short positions.
Investors will enter BTC future contracts that expire after one month. Thus, the Fund helps investors predict and make the timing of the BTC market by providing options for profit in price declines.
Broadly, the Exchange traded fund is set at 7.8HKD and is specifically customized for investors who prefer greater control over their portfolios.
Read Bitcoin’s [BTC] Price Prediction 2024-25
Implications on investors
Notably, the inverse ETF provides investors who are hesitant towards BTC over market volatility a chance to manage their risks. Equally, the fund provides a novel path for investors to profit from bearish market conditions.
However, CSOP warned investors that such investments could plummet over 20% in a single day, leading to substantial losses.
