The Securities and Exchange Commission (SEC) of Thailand has officially approved One Asset Management (ONEAM) to launch the country’s first spot Bitcoin exchange-traded fund (ETF), a landmark decision in the nation’s financial sector. This ETF will be exclusively available to wealthy and institutional investors, reflecting a cautious regulatory stance towards retail investor participation.
Thailand Continues The Spot Bitcoin ETF Approval Wave
The approved fund is set for distribution from May 31 to June 6, with an assigned investment risk level of eight, indicating a high-risk profile. The ONE Bitcoin ETF will allocate its assets across 11 leading global BTC funds to ensure liquidity and security.
These underlying funds have been vetted by regulatory agencies in the United States and Hong Kong. “Digital assets are an alternative asset that have low correlation with other financial assets. They are suitable to help investors diversify investment risks,” said Pote Harinasuta, CEO of ONEAM.
This approval follows a trend seen globally, with the US SEC and Hong Kong’s Securities and Futures Commission recently endorsing spot BTC ETFs. These international endorsements likely influenced Thailand’s SEC, highlighting the growing acceptance of Bitcoin ETFs as a mainstream investment option.
Bitcoin’s market capitalization stands at $1.4 trillion, compared to gold’s $14 trillion, indicating substantial growth potential given BTC’s finite supply of 21 million coins. “Although the supply of Bitcoin is limited at 21 million, demand is rising as it gains popularity. We see high growth potential for Bitcoin,” noted Harinasuta.
Over the past 11 years, BTC has demonstrated an average annual return of 124%, with volatility averaging 83% per year. “Investing in Bitcoin can offer good returns, but comes with high volatility,” Harinasuta emphasized.
ONEAM advises investors to allocate up to 5% of their portfolios to BTC. This strategy is expected to yield an average return of 8.90% per year with a Sharpe ratio of 0.71, and a maximum drawdown of -22.4%. Comparatively, a portfolio without BTC would yield an average return of 5.80% per year, with a Sharpe ratio of 0.48 and a maximum drawdown of -20.4%.
A key feature of the ONE Bitcoin ETF is its focus on the security of coin storage. Harinasuta stressed the importance of secure storage, citing historical issues with data loss and theft in direct BTC investments.
“Investing in Bitcoin directly through various platforms contains risks, with past problems including data loss or stolen digital assets via the online system,” he explained. The ETF mitigates these risks by using custodians that adhere to institutional standards, ensuring that coins are stored offline, offering high security.
The Thai SEC’s approval responds to increasing demand from local institutions for regulated BTC investment options. This move aligns Thailand with other jurisdictions like the US, Hong Kong, Australia, and the UK, which have embraced regulated Bitcoin investment vehicles earlier this year.
While ONEAM has secured its position as the first to offer a spot ETF, MFC Asset Management is still awaiting regulatory approval for its own ETF. The competitive landscape in Thailand’s emerging spot Bitcoin ETF market will be closely watched as more firms seek to tap into the growing institutional interest in digital assets.
At press time, BTC traded at $69,045.
Featured image created with DALL·E, chart from TradingView.com
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