The new inverse Bitcoin ETF enables investors to profit from the crypto asset price declines

Hong Kong ETF issuer, CSOP has announced the launch of its new Bitcoin futures inverse product. The CSOP Bitcoin Future Daily (-1x) Inverse Product (7376.HK) is to be listed on the Hong Kong Stock Exchange on July 23.

The peculiarity of the new investing product is that, instead of directly participating in the bitcoin futures market, 7376.HK offers opportunities to profit from the same market decline. As the company explains, the inverse ETF “adopts a futures-based replication strategy to achieve the investment objectives, investing directly in the spot month CME Bitcoin Futures following a rolling strategy.”

CSOP Asset Management is one of the largest asset managers and ETF issuers in China. Its new product is the first of this kind in Asia. The expected investment results should closely correspond to the one-time inverse daily performance of the S&P Bitcoin Futures Index. Reportedly, CSOP targets $50 million to $100 million AUM over two years for the inverse Bitcoin ETF.

The firm will charge a management fee of 1.99% for its new product. Its listing price will be about HKD 7.8 per unit, with a trading lot of 100.

Inverse Bitcoin ETF is another pioneering product in the Hong Kong crypto market. CSOP Bitcoin Futures ETF (3066.HK) launched in December 2022. Furthermore, the SEC of Hong Kong has officially approved both Bitcoin and Ethereum ETF products from major local asset managers ahead of the U.S. regulators. In April 2024, Spot Bitcoin and Ethereum exchange-traded funds (ETFs), the first crypto ETFs in Asia, officially went live in the Hong Kong stock market.

All these investment product launches are part of Hong Kong’s efforts to establish the city as a crypto-friendly global hub. In 2023, Hong Kong introduced milder crypto regulations that would let retail investors trade certain “large-cap tokens” on licensed exchanges, emerging as one of the new hubs for the virtual asset industry.

Meanwhile, Hong Kong’s securities watchdog has reportedly added Stanley Fung, a former senior executive at a Binance-affiliated crypto exchange HKVAEX, to its staff to be more familiar with the crypto exchange management peculiarities, as the SFC weighs virtual asset exchange applications under a new exchange licensing system.