Thailand crypto ETFs may see slow start despite new rules: CoinShares

Thailand’s new Bitcoin and Ether ETF rules take effect Friday, but CoinShares expects modest initial inflows as existing investment options compete for demand.

Thailand’s first crypto exchange-traded funds (ETFs) may get off to a slow start despite Bangkok’s efforts to expand access to regulated digital asset investments.

“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.

The country opens a new route for crypto exposure on Friday as its rules for Bitcoin (BTC) and Ether (ETH) ETFs to list on the Stock Exchange of Thailand take effect.

The rules will allow retail Thai investors to access locally listed crypto ETFs, while restricting overseas crypto ETF investments through domestic brokers to institutional and ultra-high-net-worth investors.

Thailand’s first crypto funds will need regulatory approval and the necessary custody and distribution arrangements before trading can begin.

Hong Kong offers a cautionary comparison

Butterfill pointed to Hong Kong as an example of how even a major financial center can struggle to attract substantial crypto ETF inflows.

Hong Kong accounts for just 0.42% of assets in global crypto exchange-traded products (ETPs) despite the city’s status as an international financial hub, he said.

Global crypto investment products held $172.9 billion in assets under management, including $733 million in Hong Kong, according to CoinShares data as of late September.

First Thai crypto ETF launches remain uncertain

Butterfill said that existing investment options may limit demand for new Thai ETFs, as some investors already gain Bitcoin exposure through foreign funds or direct crypto trading.

Thailand’s MFC Asset Management, which Butterfill identified as a firm worth watching for potential ETF launches, introduced its Bitcoin ETF Tracker Fund (MBTCETF-UI) in 2024. The fund invests in BlackRock’s iShares Bitcoin Trust (IBIT), the world’s largest spot Bitcoin ETF by assets under management.

“Local ETFs therefore need to attract new investors or offer a compelling reason to switch,” Butterfill said.

Apart from MFC, Butterfill pointed to ONE Asset Management as another potential ETF issuer worth watching. In 2024, ONE became the first Thai asset manager to receive approval for a Bitcoin ETF-linked fund.

Related: Bitcoin ETFs shed $261M as XRP funds buck weekly outflow trend

Butterfill said he hadn’t confirmed either company’s plans to launch a locally listed crypto ETF or when the first products might begin 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.

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