Thailand plans to launch its first crypto exchange-traded funds (ETFs) on Friday, but early inflows are expected to be limited. James Butterfill, head of research at CoinShares, told Cointelegraph that initial capital may reach only tens of millions of US dollars across the first products, rather than the billions some had anticipated.

The new rules allow retail investors in Thailand to purchase crypto ETFs listed on the Stock Exchange of Thailand, while restricting overseas crypto ETF investments through domestic brokers to institutional and ultra-high-net-worth individuals. Before trading can begin, each fund must obtain regulatory approval and establish custody and distribution arrangements.

Butterfill referenced Hong Kong as a cautionary example. Despite its status as an international financial hub, Hong Kong accounts for just 0.42% of assets in global crypto exchange-traded products (ETPs). CoinShares data from late September showed total global crypto ETP assets under management at $172.9 billion, with Hong Kong holding $733 million.

Existing investment options may constrain demand for new Thai ETFs. Some investors already access Bitcoin exposure through foreign funds or direct crypto trading. MFC Asset Management, which Butterfill highlighted as a potential issuer, introduced a Bitcoin ETF Tracker Fund (MBTCETF-UI) in 2024. The fund invests in BlackRock’s iShares Bitcoin Trust (IBIT), the largest spot Bitcoin ETF by assets under management.

Another firm to watch is ONE Asset Management, which became the first Thai asset manager to receive approval for a Bitcoin ETF-linked fund in 2024. Butterfill noted that local ETFs will need to attract new investors or provide a compelling reason for existing investors to switch.

Neither MFC nor ONE Asset Management has confirmed plans to launch locally listed crypto ETFs, nor have they provided timelines for when products might begin trading. Cointelegraph reached out to Thailand’s Securities and Exchange Commission, ONE Asset Management, and MFC Asset Management but had not received responses by publication time.

Asia Express Magazine covers emerging financial trends across the region, including developments in digital assets.