In a landmark move, the Thai Securities and Exchange Commission (SEC) has given the green light to One Asset Management (ONEAM) to launch Thailand’s first Bitcoin exchange-traded fund (ETF). The new offering is initially restricted to wealthy and institutional investors only. Still, it marks a significant step in integrating digital assets into the Thai financial market.

ONEAM Launches Bitcoin ETF Fund for Institutional Investors

The ONE Bitcoin ETF Fund of Funds Unhedged and not for Retail Investors (ONE-BTCETFOF-UI) will be available from May 31 to June 6. It carries an investment risk level of eight, reflecting its nature as a high-volatility asset. The fund’s investment strategy includes allocating assets to 11 leading global funds to ensure liquidity and safety, with adherence to international regulatory standards reviewed by authorities in the United States and Hong Kong.

Pote Harinasuta is the CEO of ONEAM. He has stated that digital assets are an alternative asset with low correlation to other financial assets, making them suitable for helping investors diversify their investment risks. He noted that this approval positions ONEAM at the forefront of financial innovation in Thailand.

Global Recognition and Market Dynamics

Bitcoin ETFs have garnered increasing recognition globally, with the U.S. SEC and Hong Kong’s Securities and Futures Commission approving similar funds that invest in Bitcoin and Ethereum. This international acceptance underscores the growing legitimacy and appeal of digital assets. Recently, Australia has also approved Bitcoin Spot ETFs. However, the US market deals with 83% of the total market of BTC ETFs.

Bitcoin’s market capitalization stands at approximately $1.4 trillion. Despite the finite supply of 21M Bitcoins, the digital currency continues to attract interest due to its significant growth potential. Over the past 11 years, Bitcoin has delivered an average annual return of 124%, albeit with high volatility at 83%.

Investment Strategy and Recommendations by ONEAM

Given the high volatility, ONEAM advises investors to allocate only 5% of their portfolios to Bitcoin, aiming for an annual return of 8.90%. The Sharpe ratio for this strategy is 0.71, with a maximum drawdown of -22.4%. In comparison, a portfolio excluding Bitcoin generates a 5.80% annual return, with a Sharpe ratio of 0.48 and a maximum drawdown of -20.4%. This suggests that including Bitcoin can enhance returns and improve the Sharpe ratio, despite a slight increase in overall volatility.

As the first Thai company to offer a spot Bitcoin ETF, ONEAM is paving the way for the country’s financial sector to embrace digital assets. Meanwhile, other firms like MFC Asset Management are awaiting SEC approval for similar Bitcoin ETFs, indicating a growing interest and potential for expansion in this innovative investment arena.