Thailand's Securities and Exchange Commission (SEC) has taken a measured step towards cryptocurrency by greenlighting the country's first spot Bitcoin exchange-traded fund (ETF). However, access to this new investment vehicle will be limited to ultra high net-worth individuals (UHNWI) and institutional investors, reflecting a cautious approach to the still-volatile crypto market.

The approved ETF, launched by local asset management firm One Asset Management (ONEAM), is called the "ONE Bitcoin ETF Fund of Funds Unhedged and not for Retail Investors (ONE-BTCETFOF-UI)". This lengthy title underscores the restricted nature of the product, which is designed for sophisticated investors with a high-risk tolerance. The ETF's risk score of eight reinforces this point, as it falls squarely within the high-risk category due to Bitcoin's inherent price fluctuations.

To mitigate these risks and ensure sufficient liquidity for investors, ONEAM will reportedly invest in a basket of 11 global funds. This structure reflects the complex nature of bringing a spot Bitcoin ETF to market in Thailand, where regulators have only recently opened the door to cryptocurrency investment. Notably, the U.S. and Hong Kong have already reviewed the Thai policy for this specific spot BTC investment product.

Another Thai asset management company, MFC Asset Management, is also seeking SEC approval for its own spot Bitcoin ETF, which is expected to follow a similar path of targeting institutional and high net-worth investors. The SEC's move comes amidst a backdrop of growing interest in crypto ETFs globally. The success of these products in the U.S. likely played a role in Thailand's decision, and the March 2024 adjustment of regulations allowing asset management companies to explore the crypto industry further paved the way.

It's important to note that Thailand is taking a cautious approach, balancing its desire to foster a digital economy with the need to protect less experienced investors. The tax exemption bill on cryptocurrency gains passed in March highlights the country's commitment to the digital asset space, but the restricted access to the first spot Bitcoin ETF suggests a measured rollout for now.