The Launch of Asia’s First Bitcoin Futures Inverse Product in Hong Kong

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 exchange-traded fund (ETF) offered by China Southern Asset Management Co., Ltd (CSOP) is specifically designed to allow investors to profit from declines in Bitcoin’s price.

Product Details

The CSOP Bitcoin Futures Daily (-1x) Inverse Product will be listed on the Hong Kong Stock Exchange (HKEX) at an initial price of around 7.8 Hong Kong dollars (HKD) per unit. It aims to provide investment results that closely mirror the inverse daily performance of the S&P Bitcoin Futures Index. This is achieved through a futures-based replication strategy, which involves direct investments in spot-month Bitcoin futures traded on the Chicago Mercantile Exchange (CME).

Ms. Ding Chen, CEO of CSOP Asset Management, emphasized the importance of offering diversified investment products to investors in the Asia-Pacific region. She mentioned that CSOP is the leading provider of Leveraged and Inverse products in Hong Kong, boasting a market share of 99%. The introduction of the first futures-based inverse Bitcoin product in Hong Kong provides investors with opportunities to benefit from declines in Bitcoin’s value.

Market Trends

This launch comes after a tumultuous period for Bitcoin investors, with the cryptocurrency’s value dropping below $54,000 in early July before bouncing back. The optimism around pro-crypto sentiments, such as those related to former President Donald Trump’s potential political future, has influenced market dynamics.

The introduction of the CSOP Bitcoin Futures Daily (-1x) Inverse Product signifies another milestone in CSOP’s expansion within the Asia-Pacific region. This initiative builds on the success of the CSOP Bitcoin Futures ETF (3066.HK) launched in December 2022, one of the first crypto-linked ETFs in the area. HKEX has been actively trading spot crypto ETFs since late 2022, starting with CSOP’s Bitcoin Futures ETF and Ether Futures ETF. Samsung Asset Management Hong Kong also entered the market with a Bitcoin futures ETF in January 2023.

Market Performance

Data compiled by Bloomberg shows that inverse crypto exchange-traded products have garnered approximately $106 million globally to date. The largest of these is the Short Bitcoin Strategy ETF from ProShares Advisors LLC, which boasts $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 now amount to $362 million. Spot Bitcoin ETFs launched in the U.S. in January have collectively amassed a staggering $60.7 billion in assets.

The launch of Asia’s first Bitcoin futures inverse product in Hong Kong represents a significant development in the cryptocurrency market. As investors continue to seek opportunities in this space, innovative products like the CSOP Bitcoin Futures Daily (-1x) Inverse Product offer new ways to capitalize on market trends and diversify investment portfolios. With the growing popularity of cryptocurrency ETFs, it is evident that the demand for such products is on the rise, signaling a shifting landscape in the financial industry.