CSOP writes that following the successful launch of Asia’s first Bitcoin futures ETF, the CSOP Bitcoin Futures ETF (3066.HK) in December 2022, the firm is set to list Asia’s first Bitcoin futures inverse product in Hong Kong.
The CSOP Bitcoin Futures Daily (-1x) Inverse Product (7376.HK) aims to provide investment results that, before fees and expenses, closely correspond to the one-time inverse daily performance of the S&P Bitcoin Futures Index (the “Index”). 7376.HK adopts a futures-based replication strategy to achieve the investment objectives, investing directly in the spot month CME Bitcoin Futures following a rolling strategy. With a listing price of about HKD 7.8 per unit, trading lot of 100, and management fee of 1.99 per cent, 7376.HK has received an initial investment of around USD30 million.
The firm writes that bitcoin has been the most erratic among major global assets in the last ten years, with volatility as high as 38.3 per cent in 2023, surpassing crude oil and Nasdaq-100. With no intrinsic value, its price is highly volatile and speculative, influenced by market demand and supply, as well as market news and rumours.
The firm writes that during the rally in 2024Q1, global futures-based bitcoin inverse products had the highest quarterly inflow of USD79 million since 2023Q2. As of end of June 2024, bitcoin CME futures saw a record high in net short interest among leveraged funds, at about USD5.7 billion, likely due to a growing popularity of basis trade, the firm says. “When the market reels, bitcoin drawdown could be even more prominent, suggesting more chances for short trades. Bitcoin price might also be affected by uncertainties amid the US presidential election, supply overhang, and Fed’s monetary policy.”
The Index tracks the performance of the nearest maturing monthly bitcoin futures contracts (Symbol: BTC) trading on CME. The Index is a price weighted, excess return (and not a total return) index and therefore reflects the CME Bitcoin Futures price movements only (and not any notional interest earnings) in USD. The firm writes that instead of directly participating in the bitcoin futures market to short bitcoin, 7376.HK offers an easy and efficient way to capture investment opportunities brought by the decline in the price of bitcoin futures.
Ding Chen, CEO of CSOP Asset Management Limited, is delighted to announce the listing of CSOP Bitcoin Futures Daily (-1x) Inverse Product (7376.HK). She says: “As an ETF issuer esteemed by investors in the APAC region, CSOP has always aimed to offer comprehensive and diversified investment products. We are currently the leading provider of Leveraged and Inverse products in Hong Kong, with a market share of 99 per cent. The first futures-based inverse bitcoin product listed in Hong Kong creates opportunities for investors to gain from downside movements in bitcoin.”
