Bitrabo Editorial
Thailand has entered the Bitcoin world cautiously by introducing a unique exchange-traded fund (ETF) targeting high net-worth individuals and institutions. This move aligns with the global surge in cryptocurrency interest, but Thai regulators are proceeding carefully, focusing on security and controlled access for novices.
Restricted Access for the Elite
The Securities and Exchange Commission (SEC) approved the ONE Bitcoin ETF Fund of Funds Unhedged, introduced by One Asset Management (ONEAM), as reported by the Bangkok Post. Unlike conventional ETFs open to the public, this ETF imposes a significant entry barrier, limiting participation to accredited investors, including institutions and affluent individuals. This exclusivity mirrors the cautious approach adopted by regulators in Asia towards Bitcoin.
Prioritizing Security: Bitcoin Shielded with Safety Measures
The ONEAM ETF introduces a unique investment model by investing in a diversified portfolio of 11 globally recognized Bitcoin funds rather than holding the cryptocurrency directly. This ‘fund-of-funds’ structure aims to reduce risks associated with individual trading platforms that have faced security breaches in the past. Additionally, the ETF focuses on secure storage practices, utilizing international custodians favored by institutional investors to store Bitcoin offline, minimizing exposure to cyber threats.
Driven by the potential to diversify portfolios, accredited investors are drawn to Bitcoin due to its low correlation with traditional assets like stocks and bonds, reducing overall portfolio volatility. While recognizing the benefits, the SEC cautions on the inherent volatility and advises a conservative approach, suggesting a maximum 5% allocation to Bitcoin within investors’ portfolios.
Strategic Progress for Thailand
Thailand’s introduction of Bitcoin ETFs is a strategic move by regulators acknowledging the expanding cryptocurrency interest while safeguarding less experienced investors. The restricted access and emphasis on secure storage illustrate the cautious approach taken. This contrasts with Hong Kong’s recent approval of ETFs investing directly in Bitcoin and Ethereum, potentially broadening investor participation.
Featured image from Pastel, chart from TradingView