On July 23, Hong Kong made history by launching Asia’s first Bitcoin futures inverse product, the CSOP Bitcoin Futures Daily (-1x) Inverse Product (7376.HK). This innovative exchange-traded fund (ETF) introduced by China Southern Asset Management Co., Ltd (CSOP) offers investors the opportunity to profit from declines in Bitcoin’s price. With an initial price of approximately 7.8 Hong Kong dollars (HKD) per unit, the CSOP Bitcoin Futures Daily (-1x) Inverse Product is listed on the Hong Kong Stock Exchange (HKEX). The ETF is designed to closely mirror the inverse daily performance of the S&P Bitcoin Futures Index through a futures-based replication strategy. This strategy involves direct investments in spot-month Bitcoin futures traded on the Chicago Mercantile Exchange (CME).
According to Ms. Ding Chen, CEO of CSOP Asset Management, the company has a strong reputation in the APAC region as a provider of comprehensive and diversified investment products. With a market share of 99% in Leveraged and Inverse products in Hong Kong, CSOP is at the forefront of offering innovative investment opportunities. The launch of the first futures-based inverse Bitcoin product in Hong Kong provides investors with a unique chance to benefit from declines in Bitcoin’s value. This move comes at a time when the cryptocurrency market has experienced significant volatility, with Bitcoin’s value fluctuating below $54,000 in early July before rebounding due to positive sentiments regarding the future of cryptocurrencies.
The introduction of the CSOP Bitcoin Futures Daily (-1x) Inverse Product signifies a significant milestone in CSOP’s expansion within the Asia-Pacific region. Building on the success of the CSOP Bitcoin Futures ETF (3066.HK) launched in December 2022, which was one of the first crypto-linked ETFs in the region, CSOP is demonstrating its commitment to offering innovative investment solutions to investors. Since late 2022, HKEX has been trading spot crypto ETFs, starting with CSOP’s Bitcoin Futures ETF and Ether Futures ETF. These ETFs track Bitcoin futures and Ether futures cash-settled contracts traded on the CME, providing investors with exposure to the crypto market.
Data compiled by Bloomberg indicates that inverse crypto exchange-traded products have attracted approximately $106 million in assets globally. The largest of these products is the Short Bitcoin Strategy ETF from ProShares Advisors LLC, which has accumulated $62.5 million in assets and charges a 1.33% management fee. In Hong Kong, the total assets held by the six Bitcoin and Ether ETFs currently amount to $362 million. Meanwhile, in the U.S., spot Bitcoin ETFs launched in January have collectively amassed $60.7 billion in assets, showcasing the growing interest in cryptocurrency investment products globally.
The introduction of Asia’s first Bitcoin futures inverse product in Hong Kong by CSOP marks a significant development in the cryptocurrency market. With investors increasingly seeking diversified investment opportunities, innovative products like the CSOP Bitcoin Futures Daily (-1x) Inverse Product provide a unique way to capitalize on the volatility of the crypto market. As the demand for crypto investment products continues to grow, it is likely that we will see further developments and expansions in the cryptocurrency ETF market in the near future.
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