The Hong Kong Stock Exchange (HKEX) plans to launch a pioneering Bitcoin financial product, the first of its kind in Asia, on July 23. This move signifies a milestone for the cryptocurrency market in Asia.
According to reports, HKEX will launch the CSOP Bitcoin Futures Daily (-1x) Inverse Product (7376 HK), Asia’s first Bitcoin inverse product. This innovative offering aims to provide investors with a tool to potentially profit from Bitcoin price declines or hedge against market downturns.
The product, managed by CSOP Asset Management Limited, targets the inverse (-1x) daily performance of the S&P BTC Futures Index. It achieves this by investing in short positions of Bitcoin futures traded on the Chicago Mercantile Exchange (CME). This includes both standard and micro Bitcoin futures.
Additionally, HSBC Institutional Trust Services (Asia) Limited will serve as the trustee for this USD-denominated product, trading it on the HKEX in Hong Kong dollars. The annual average daily ongoing charge is 2.00%, and the estimated annual average daily tracking difference is -0.05%.
Target audience and Bitcoin trading considerations
Designed primarily for sophisticated, trading-oriented investors, the product is intended for short-term trading, particularly day trading. Holding the product for longer periods may result in performance deviations from the intended inverse performance.
Moreover, investors need to be aware of the risks linked to this product. These risks encompass notable price fluctuations, potential high expenses related to trading positions, and operational uncertainties. The unpredictable behaviour of Bitcoin futures implies that investors run the risk of losing their entire investment within a single day.
The launch of this inverse product coincides with the scheduled debut of spot Ethereum ETFs in the United States. It highlights the growing integration of crypto-based financial products in traditional markets.
Nevertheless, it arises amidst the heightened fluctuations in Bitcoin and other cryptocurrencies. Drawing attention and wariness from investors across the globe. The Inverse Product presents a unique chance for investors to participate in Bitcoin’s price movements using a regulated financial tool.
Related | Crypto exchange OKX exits Nigeria, citing regulatory changes
