CoinShares Anticipates Modest Launch for Thailand's Crypto ETF Market Under New Framework
As Thailand implements new regulatory framework for Bitcoin and Ether ETFs this Friday, CoinShares projects limited early capital inflows due to competition from established investment alternatives.
Despite Bangkok's push to broaden availability of regulated digital asset investment vehicles, Thailand's inaugural crypto exchange-traded funds (ETFs) could experience a subdued launch.
"I would expect modest inflows initially, with tens of millions of US dollars across the first products a more realistic starting expectation than billions," James Butterfill, head of research at digital asset investment firm CoinShares, told Cointelegraph.
A new pathway for cryptocurrency exposure becomes available in the country on Friday when regulations governing Bitcoin (BTC) and Ether (ETH) ETFs for listing on the Stock Exchange of Thailand become effective.
Under the new regulations, retail investors in Thailand will gain access to domestically listed crypto ETFs, while limiting access to foreign crypto ETF products through local brokerage firms exclusively to institutional players and ultra-high-net-worth individuals.
Before trading commences, Thailand's inaugural crypto funds must secure regulatory authorization and establish the required custody infrastructure and distribution mechanisms.
Hong Kong offers a cautionary comparison
Drawing on Hong Kong as a reference point, Butterfill highlighted how even prominent financial hubs can face difficulties generating significant crypto ETF capital flows.
Despite its standing as a global financial powerhouse, Hong Kong represents merely 0.42% of worldwide crypto exchange-traded product (ETP) assets, he noted.
According to CoinShares data from late September, global crypto investment products managed $172.9 billion in assets under management, with Hong Kong accounting for $733 million of that total.
First Thai crypto ETF launches remain uncertain
According to Butterfill, the availability of current investment vehicles could constrain appetite for Thailand's new ETF offerings, given that certain investors have already secured Bitcoin exposure via international funds or through direct cryptocurrency purchases.
MFC Asset Management in Thailand, which Butterfill highlighted as a company to monitor for possible ETF releases, launched its Bitcoin ETF Tracker Fund (MBTCETF-UI) in 2024. This fund allocates capital into BlackRock's iShares Bitcoin Trust (IBIT), which ranks as the largest spot Bitcoin ETF globally by assets under management.
"Local ETFs therefore need to attract new investors or offer a compelling reason to switch," Butterfill said.
Beyond MFC, Butterfill identified ONE Asset Management as an additional prospective ETF provider to monitor. During 2024, ONE achieved the distinction of becoming Thailand's first asset management company to obtain authorization for a Bitcoin ETF-linked fund.
Butterfill indicated he had not verified the plans of either firm regarding the launch of a domestically listed crypto ETF or established timing for when initial products could start trading.
Cointelegraph contacted Thailand's SEC, ONE Asset Management and MFC Asset Management about potential ETF launches but had not received responses by publication time.