Hong Kong Stock Exchange to List Asia’s First Inverse Bitcoin ETF

China Southern Asset Management Company Ltd (CSOP) is preparing to launch Asia’s first inverse Bitcoin ETF in Hong Kong. According to an announcement, the new Bitcoin futures inverse product will be listed on the Hong Kong Stock Exchange on July 23.

The product will allow investors to profit from the decline in Bitcoin prices. This development comes after CSOP successfully launched its Bitcoin Future ETF in 2022. 

Hong Kong’s First BTC Inverse ETF

As part of its efforts to penetrate the Asian-Pacific region, CSOP launched its CSOP Bitcoin Futures ETF with the stock code 3066.HK in December 2022. The firm continues its expansion by introducing the CSOP Bitcoin Future Daily 1-x Inverse Product (7376.HK). 

This product will have similar results to the S&P Bitcoin Futures Index’s inverse daily performance. It uses a futures-based replication strategy to achieve its investment goals. This strategy enables it to invest directly in spot-month Chicago Mercantile Exchange Bitcoin Futures.

According to the CSOP, the ETF will list on the Hong Kong Stock Exchange at approximately 7.8 Hong Kong dollars per unit. The CSOP has also capped the product’s management fee at 1.99%. 

Already, 7376.HK has garnered approximately $30 million in initial investment. The CSOP’s CEO, Ding Chen, expressed delight in the product listing.

In her remarks, she described the asset management firm as the APAC region’s esteemed ETF issuer committed to offering investors comprehensive and diversified investment options. 

Furthermore, Chen boasted that the SCOP is Hong Kong’s leading provider of inverse and leveraged products with a 99% market share. She noted that 7376.HK allows investors to gain from Bitcoin’s downside movement. 

Meanwhile, spot crypto ETFs have been trading on the Hong Kong Stock Exchange since the end of 2022, following CSOP’s launch of BTC and ETH futures ETFs. 

These products track Bitcoin and Ethereum futures cash contracts on the Chigaco Mercantile Exchange. Later, in January 2023, Samsung Asset Management introduced its Bitcoin futures ETF on the HKEX. 

As of April 29, HKEX cryptocurrency ETFs have garnered $170 million (1.3 billion Hong Kong dollars) in assets under management.

Bitcoin ETF Outlook

Meanwhile, US Bitcoin ETFs reached a year-till-date net inflow of over $17 billion yesterday. According to Bloomberg’s ETF analyst Eric Balchunas, the ETFs’ inflow YTD is the most crucial number to watch as it captures the net price appreciation and GBTC unlock. Also, it captures how much the ETFs have grown in net demand and adoption.

After an over 91% decline from the $422 million net inflows recorded on July 16, the spot BTC ETFs have picked pace. 

According to data from Farside investors, the ETFs recorded $383.6 million in net inflows as of July 19. This figure marks a 90% increase from the $37.2 million in net inflows recorded on July 18.

Similarly, Hong Kong bitcoin ETFs have witnessed mild improvement. The spot BTC ETFs have picked pace after recording $30.89 million in outflows on June 26. As of July 15, the three Hong Kong spot BTC ETFs recorded $36.77 million in net inflows, marking six consecutive days of steady inflow streak. 

Besides July 17, when HK Bitcoin spot ETFs recorded zero capital flow, the products have recorded consistent inflow since July 8. According to Coinglass data, they have amassed over $289 million in net inflow since their launch on April 30.

Disclaimer: The opinions expressed in this article do not constitute financial advice. We encourage readers to conduct their own research and determine their own risk tolerance before making any financial decisions. Cryptocurrency is a highly volatile, high-risk asset class.

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