Thai SEC Greenlights Nation’s First Bitcoin Fund

The Securities and Exchange Commission (SEC) has endorsed One Asset Management (ONEAM) to become the first firm to launch a spot Bitcoin exchange-traded fund (ETF) in Thailand, targeting wealthy and institutional investors.

The ONE Bitcoin ETF Fund of Funds Unhedged and not for Retail Investors (ONE-BTCETFOF-UI) is set to be distributed from May 31 to June 6, carrying an investment risk level of eight.

This fund aims to invest in 11 leading global funds to ensure liquidity and safety, with coin storage meeting international standards and oversight from regulatory agencies in the US and Hong Kong.

Meanwhile, MFC Asset Management is still awaiting SEC approval for a Bitcoin ETF, also limited to wealthy and institutional investors.

“Digital assets are an alternative asset class with low correlation to other financial assets, making them suitable for diversifying investment risks,” said Pote Harinasuta, chief executive of ONEAM.

Bitcoin ETFs are rapidly gaining international recognition, especially from regulatory agencies around the globe. Earlier this year, the US SEC approved the creation of funds that invest directly in spot Bitcoin through ETFs, marking a significant milestone.

In April, Hong Kong’s Securities and Futures Commission followed suit by allowing the establishment of ETFs that invest in both Bitcoin and Ethereum.

Bitcoin’s market capitalization currently stands at $1.4 trillion, compared to $14 trillion for gold.

“Although the supply of Bitcoin is capped at 21 million, demand is increasing as it gains popularity. We see significant growth potential for Bitcoin,” said Pote Harinasuta, CEO of One Asset Management (ONEAM).

Over the past 11 years, Bitcoin has delivered an average annual return of 124%, though it also comes with high volatility, averaging 83% per year.

“Investing in Bitcoin can offer substantial returns but is accompanied by high volatility,” he noted.

ONEAM advises investors to allocate only 5% of their portfolio to Bitcoin to achieve an expected return of 8.90% per year. The risk-adjusted return (Sharpe ratio) for this portfolio is 0.71, with a maximum drawdown of -22.4%.

In comparison, a portfolio without Bitcoin generates an annual return of 5.80%, with a Sharpe ratio of 0.48 and a maximum drawdown of -20.4%.

“This indicates that including Bitcoin in a portfolio can enhance the expected return and Sharpe ratio, despite a slight increase in overall volatility,” Mr. Pote explained.

He also emphasized the importance of secure coin storage in Bitcoin ETFs. “Investing directly in Bitcoin through various platforms carries risks, such as data loss or stolen digital assets,” he said.

By investing through ETFs, unitholders’ data or coins are safeguarded by custodians who adhere to institutional-grade standards, including offline coin storage, ensuring a high level of security.

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