SEC Approval for ONEAM

The Securities and Exchange Commission (SEC) of Thailand has endorsed One Asset Management (ONEAM) to launch the country's first spot Bitcoin exchange-traded fund (ETF).

The fund, named ONE Bitcoin ETF Fund of Funds Unhedged and not for Retail Investors (ONE-BTCETFOF-UI), will be distributed between May 31 and June 6 and boasts an investment risk level of eight.

Exclusivity for Wealthy and Institutional Investors

According to a report from Bangkok Post, the ONE-BTCETFOF-UI fund will be limited to wealthy and institutional investors. The policy mandates investment in 11 leading global funds to ensure liquidity and safety.

The fund will store coins using international standards and has been rigorously reviewed by US and Hong Kong regulatory agencies.

A Diversification Tool

Pote Harinasuta, chief executive of ONEAM, highlighted digital assets as an alternative asset class. He noted, "Digital assets have low correlation to other financial assets, making them suitable for diversifying investment risks."

International Recognition and High Growth Potential

The approval of ONEAM's fund comes amid growing international recognition of Bitcoin ETFs. Both the US SEC and Hong Kong's Securities and Futures Commission have allowed the creation of funds investing directly in spot Bitcoin and Ethereum.

Despite Bitcoin's limited supply of 21 million, its rising demand and popularity have led ONEAM to identify high growth potential for the cryptocurrency.

Over the past 11 years, Bitcoin has generated an impressive average return of 124% per year, albeit with high annual volatility of 83%.

Recommendations and Security Measures

ONEAM recommends that investors allocate only 5% of their portfolio to Bitcoin, a strategy that aims to ensure a return of 8.90% per year, a Sharpe ratio of 0.71, and a maximum drawdown of -22.4%.

That contrasts with a portfolio without Bitcoin, which generates a return of 5.80% per year, a Sharpe ratio of 0.48, and a maximum drawdown of -20.4%.

Pote emphasized the importance of secure coin storage in Bitcoin ETFs. He explained that investing directly through various platforms carries risks such as data loss or stolen digital assets.

ETFs will distribute unitholders' data or coins through custodians, employing the same standards used by institutional investors, including offline storage for enhanced security.

Future Prospects

Meanwhile, MFC Asset Management is also awaiting SEC approval for its own Bitcoin ETF, which will similarly be restricted to wealthy and institutional investors. The future looks promising as more firms explore the possibilities of digital asset investment.

"Although the supply of Bitcoin is limited at 21 million, demand is rising as it gains popularity. We see high growth potential for Bitcoin." - Pote Harinasuta, Chief Executive, ONEAM.