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News/Thailand Approves Bitcoin ETF Amid Global Surge in BTC ETF Investments

Thailand Approves Bitcoin ETF Amid Global Surge in BTC ETF Investments

Van Thanh Le

Jun 5 2024

last month3 minutes read
Cubic robot amidst Bitcoin vortex, symbolizing institutional crypto adoption

Thailand Approves Its First Bitcoin ETF

Thailand's SEC has greenlit One Asset Management (ONEAM) to launch the country's inaugural Bitcoin ETF, the ONE Bitcoin ETF Fund of Funds Unhedged (ONE-BTCETFOF-UI). Scheduled for distribution from May 31 to June 6, 2024, this fund is targeted at wealthy and institutional investors, excluding retail participants. The ETF will invest in 11 leading global Bitcoin funds, ensuring liquidity and security.

This ETF holds an investment risk level of eight. Historical data shows Bitcoin's average annual return of 124% over the past 11 years, with a high annual volatility of 83%. ONEAM advises limiting Bitcoin to 5% of a portfolio to aim for an estimated return of 8.90% per year, compared to 5.80% for a portfolio without Bitcoin.

The fund emphasizes security by adhering to international standards and using custodians to store coins offline. Regulatory bodies in the US and Hong Kong have reviewed these storage practices. Bitcoin's limited supply of 21 million, coupled with growing demand, suggests significant growth potential. The approval of the ETF aligns Thailand with global markets like the US, Hong Kong, Australia, and the UK, offering new investment avenues for local institutions.

Golden Bitcoin emerging from digital lotus, Thai temple backdrop.webp

MFC Asset Management, another Thai firm, is also seeking SEC approval for a similar Bitcoin ETF restricted to wealthy and institutional investors. This move towards Bitcoin ETFs in Thailand is a step towards mainstream cryptocurrency adoption. In the US, spot Bitcoin ETFs recently attracted $105 million in inflows. Bitcoin's price briefly exceeded $70,000 before settling back into its usual range, with long-term holders resuming accumulation, reflecting bullish market sentiment.

Pote Harinasuta, ONEAM's chief executive, noted Bitcoin's limited supply and increasing demand, predicting high growth potential. He emphasized the security benefits of investing through ETFs, which mitigate risks associated with direct investments. The approval of Thailand's first Bitcoin ETF marks a significant milestone in the regulatory framework for digital assets, providing institutional investors with a secure and convenient way to gain Bitcoin exposure.

Bitcoin ETFs Gain Momentum with Record Inflows

June 3 marked a significant milestone for Bitcoin spot ETFs with a net inflow of $105 million, extending a streak to 15 consecutive days of net inflows. By June 5, Bitcoin surged over $71,000, driven by U.S.-listed spot Bitcoin ETFs which saw a remarkable $880 million inflow on June 4, the best day since March.

Fidelity's FBTC led the charge, receiving $378 million on June 5, followed by BlackRock’s IBIT with $274 million. Even Grayscale’s GBTC, typically known for outflows, recorded a positive inflow of $28 million. Over the past month, Bitcoin ETFs attracted $3.3 billion, pushing the year-to-date net inflows past $15 billion. In May alone, digital asset investment products drew $185 million, totaling $2 billion for the month.

Spot BTC ETF inflows
Spot BTC ETF inflows.

The consistent inflows have stirred bullish sentiment in the market after a lull from mid-April to early May. Bitfinex analysts suggest the correction phase from Bitcoin's all-time high might be ending, with long-term holders accumulating Bitcoin once more. Since their January 10, 2024 launch, U.S. Spot Bitcoin ETFs have seen over $31 billion in inflows, with BlackRock’s IBIT and Fidelity’s FBTC amassing $16.93 billion and $9.35 billion, respectively.

These strong inflows have positioned BlackRock, Fidelity, and Invesco among the top 10 ETF issuers by year-to-date inflows. BlackRock's IBIT has even surpassed Grayscale Bitcoin Trust as the largest spot Bitcoin ETF, holding 295,457 BTC worth over $20.8 billion.

BlackRock's IBIT holdings as of June 4, 2024
BlackRock's IBIT holdings as of June 4, 2024.

Surprisingly, Vanguard leads overall ETF inflows with $102.8 billion, followed by BlackRock with $65.1 billion, and Invesco with $34.7 billion. Bitcoin ETFs have been pivotal for BlackRock and Fidelity, accounting for 26% and 56% of their year-to-date inflows, respectively. Despite regulatory hurdles, the momentum for cryptocurrency ETFs continues, with the SEC recently approving applications for spot Ether ETFs.

Analysts remain optimistic about the sustained interest in Bitcoin ETFs, with predictions of Bitcoin reclaiming higher price levels. There is also anticipation for upcoming spot Ethereum ETFs, although JPMorgan expects lower-than-anticipated inflows. The continued growth and acceptance of Bitcoin ETFs underscore their staying power, with financial analysts highlighting renewed interest following market corrections.

Bitcoin ETFs Continue to See Record-Breaking Inflows Amid Market Shifts

U.S. spot Bitcoin ETFs recorded a remarkable $488 million in daily net inflows on June 5, 2024, marking the 17th consecutive day of positive streaks, equaling the longest run earlier this year. Fidelity’s FBTC led the pack with $221 million in net inflows, followed by BlackRock’s IBIT with $155 million. 

Ark Invest and 21Shares’ ARKB brought in $71 million, while Bitwise’s BITB and Grayscale’s GBTC recorded $19 million and $15 million, respectively. VanEck’s and Invesco/Galaxy Digital’s funds each drew in $4 million, contributing to the historical cumulative net inflows of $15.338 billion.

Screenshot_1.png

The trading volume of the 11 spot Bitcoin ETFs reached $2.09 billion on June 5, compared to $2.78 billion on June 4 and $1.78 billion on June 3. Coinbase experienced significant Bitcoin outflows, totaling nearly $500 million over 48 hours, with net outflows of 3,067 BTC at 3:00 a.m. and 3,734 BTC at 5:00 p.m. on June 4. This massive outflow is linked to rising interest in Bitcoin spot ETFs, as investors prefer ETFs for exposure without holding the cryptocurrency directly.

Despite the strong inflows, Google Trends data shows low search interest for Bitcoin and related ETFs compared to 2021. On June 5, the search interest for "Bitcoin" in the U.S. had a score of 31, and "Bitcoin ETF" had a score of 1, indicating minimal retail investor engagement. 

gg trends.webp
Source: Google Trends

However, QCP Capital reported significant call buying activity targeting a potential $100,000 Bitcoin strike for July, influenced by low jobless claims reports and the anticipated Consumer Price Index release.

Ethereum’s performance lagged behind Bitcoin, with the SEC indicating a delay in the approval process for Ethereum spot ETFs. Analysts suggest that Ethereum will eventually outperform Bitcoin once the ETF starts trading, recommending accumulating Ethereum at a discount now.

Conclusion

As Bitcoin ETFs continue gaining traction worldwide, their approval in Thailand marks a significant milestone for institutional crypto adoption. With secure investment avenues and growing demand for digital assets, the stage is set for mainstream cryptocurrency integration across global markets.

FAQs

1. What is the significance of Thailand approving its first Bitcoin ETF?

It aligns Thailand with major markets like the US and UK, providing local institutions with a regulated and secure way to gain Bitcoin exposure. It represents a step towards mainstream cryptocurrency adoption in the country.

2. Who can invest in Thailand's new Bitcoin ETF?

The ETF is targeted at wealthy and institutional investors, excluding retail participants. It has an investment risk level of eight, suitable for accredited investors.

3. How does the ETF ensure security for Bitcoin investments?

It adheres to international standards, uses custodians to store coins offline, and has had its storage practices reviewed by regulatory bodies in the US and Hong Kong.

4. What factors contribute to the bullish outlook for Bitcoin ETFs?

Bitcoin's limited supply of 21 million coins, coupled with growing demand, suggests significant growth potential. Additionally, consistent inflows into Bitcoin ETFs and long-term holder accumulation reflect bullish market sentiment.

This article has been refined and enhanced by ChatGPT.

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