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⚡Thailand's First Bitcoin ETF Approved🇹🇭

Croxroad

06 Jun 2024 — 4 min read

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The Daily Newsletter for Intellectually Curious Readers

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❤️‍🩹 Bitcoin ETF Breakthrough

Thailand has joined the Bitcoin exchange-traded fund (ETF) trend by approving One Asset Management (ONEAM) to launch a Bitcoin ETF, as reported by the Bangkok Post. However, access to the instrument will be limited to wealthy and institutional investors. The ETF, named the ONE Bitcoin ETF Fund of Funds Unhedged, is scheduled to be distributed between May 31 and June 6 and comes with an investment risk level of eight. The approval came two months after the Thai SEC amended its local rules to allow local asset management firms to launch private funds offering Bitcoin ETFs, with strict limitations on offerings to wealthy and institutional investors.

While ONEAM has received approval, MFC Asset Management is still awaiting regulatory approval for its Bitcoin ETF. The first Thai Bitcoin ETF has a policy to invest in 11 global funds to ensure liquidity and safety, and it emphasises the storage of cryptocurrencies with international standards. Regulatory agencies in the US and Hong Kong reviewed the Thai fund before approval. "Digital assets are an alternative asset that has a low correlation with other financial assets. They are suitable to help investors diversify investment risks," said Pote Harinasuta, ONEAM’s CEO. He also noted that while Bitcoin's supply is limited to 21 million, demand is rising as it gains popularity, indicating high growth potential.

Harinasuta added that investing in Bitcoin can offer good returns but comes with high volatility. ONEAM recommends investors allocate only 5 percent of their portfolio to Bitcoin to achieve an estimated return of about 8.9 percent per year, compared to a 5.8 percent return from a portfolio without Bitcoin. With Thailand now offering a Bitcoin ETF, several jurisdictions have embraced similar instruments, which gained mainstream acceptance with their approval in the US earlier this year. Eleven Bitcoin ETFs are currently listed on US stock exchanges, with expectations for Ethereum ETFs to follow in the coming weeks or months.

😵 Bitcoin's Long Rest Ends

Bitcoin dormant in wallets for up to a decade is on the move, the latest data shows. According to on-chain analytics platform CryptoQuant, thousands of coins are “waking up” daily as Bitcoin's price action challenges the $70,000 mark. This month has seen significant on-chain volume, with "older" coins returning to circulation in their thousands.

On June 2 alone, CryptoQuant’s spent output age bands metric revealed that 2,800 BTC moved on-chain for the first time in between two and three years. Coins that had been stationary for four to five years also saw a larger movement, with 4,500 BTC. Notably, on June 3, 210 BTC, which had been dormant in wallets for a decade or more, were also moved. CryptoQuant contributing analyst J. A. Maartunn commented on the phenomenon, stating, "Old coins moving, after old coins moving, after old coins moving," which he interpreted as a phase of "distribution."

Bitcoin’s long-term holders (LTHs)—entities holding BTC without selling for 155 days or more—continue to broadly resist selling their coins. CryptoQuant noted that newer LTHs, owning coins dormant for one to two years, have reduced their selling behaviour as Bitcoin’s price recovers from a recent correction to $56,000. This shift from a distribution phase to a holding phase indicates a renewed confidence in Bitcoin’s future price potential. Various on-chain indicators point to a strong underlying bullish sentiment, supporting the notion that long-term holders are maintaining their positions, anticipating further price gains.

🦇 Validator

A validator is an individual or entity that participates in a proof of stake blockchain network by paying for the opportunity to validate transactions and earn cryptocurrency rewards. Validators play a crucial role in securing the network and confirming the validity of transactions by verifying and adding them to the blockchain. In return for their service, validators receive incentives in the form of cryptocurrency tokens native to the blockchain they are validating. This process helps maintain the integrity and efficiency of the blockchain network while providing validators with a means of earning rewards for their contribution.