Hong Kong is set to introduce a groundbreaking financial product on July 23, launching the CSOP Bitcoin Future Daily (-1x) Inverse Product (7376.HK), marking Asia’s inaugural Bitcoin futures inverse product.
This move by CSOP Asset Management, a major player in China’s asset management sector, underscores a strategic expansion in the Asia-Pacific region following the successful rollout of the CSOP Bitcoin Futures ETF (3066.HK) in December 2022.
The launch of the CSOP Bitcoin Futures Daily (-1x) Inverse Product offers a notable financial tool for investors aiming to capitalize on potential Bitcoin price declines.
This ETF is engineered to mirror the inverse daily performance of the S&P Bitcoin Futures Index.
By employing a futures-based replication strategy, it invests directly in the spot-month contracts of the Chicago Mercantile Exchange Bitcoin Futures, presenting a tactical investment avenue during Bitcoin’s volatile price movements.
With a listing on the Hong Kong Stock Exchange (HKEX), the ETF will open at an approximate price of 7.8 Hong Kong dollars per unit, per the details shared by CSOP on July 22.
This listing is part of a broader initiative to diversify the investment products available on the HKEX, particularly after the city greenlit the launch of six direct Bitcoin and Ethereum ETFs earlier this year, expanding the scope and reach of crypto-related financial products in the region.
Notably, Inverse ETFs, such as the CSOP Bitcoin Futures Daily (-1x) Inverse Product, are designed to offer short-term investment results that are the reverse of the daily performance of the referenced index.
These products are particularly appealing to professional, trade-focused investors who seek to profit from market downturns without direct exposure to the cryptocurrencies themselves.
This ETF strategically positions itself within the derivatives market by taking short positions on Bitcoin futures rather than holding the cryptocurrency directly.
Regulatory filings reveal that while the fund is denominated in US dollars, its primary investments are in short positions of Bitcoin futures traded on the Chicago Mercantile Exchange.
While offering significant profit potential during downturns, CSOP has cautioned investors about the inherent risks associated with such investments, highlighting that the fund’s value could plummet by more than 20% in a single day, according to a report.
