Thailand's rules for Bitcoin (BTC) and Ether (ETH) exchange-traded funds listed on the Stock Exchange of Thailand take effect Friday, opening regulated crypto exposure to local retail investors for the first time. CoinShares, however, expects the market to start small.

"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 the digital asset investment firm, told Cointelegraph.

The new framework cuts both ways. It allows retail Thai investors to buy locally listed crypto ETFs, but it restricts access to overseas crypto ETFs through domestic brokers to institutional and ultra-high-net-worth investors.

First products still need regulatory approval, plus custody and distribution arrangements, before trading can begin. No launch date is confirmed.

What limits initial demand?

Butterfill argued that existing routes to Bitcoin exposure may cap demand for the new products. Some Thai investors already hold Bitcoin through foreign funds or direct trading on crypto venues.

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

MFC Asset Management illustrates the competition. In 2024, the Thai firm introduced its Bitcoin ETF Tracker Fund (MBTCETF-UI), which invests in BlackRock's iShares Bitcoin Trust (IBIT), the world's largest spot Bitcoin ETF by assets under management. Investors using that structure already hold indirect exposure to the same underlying vehicle a local spot ETF would track.

Beyond MFC, Butterfill identified ONE Asset Management as another issuer worth watching. In 2024, ONE became the first Thai asset manager to receive approval for a Bitcoin ETF-linked fund. He said he had not confirmed either company's plans to launch a locally listed crypto ETF or a timeline for first trading.

Cointelegraph contacted Thailand's SEC, ONE Asset Management and MFC Asset Management about potential launches but had not received responses by publication time.

Does Hong Kong offer a warning sign?

Butterfill pointed to Hong Kong as evidence that even a major financial center can struggle to gather crypto ETF assets. Hong Kong accounts for 0.42% of assets in global crypto exchange-traded products (ETPs), despite its status as an international financial hub, according to his figures.

The global base is large. Crypto investment products held $172.9 billion in assets under management as of late September, CoinShares data shows, with Hong Kong accounting for $733 million of that total.

The comparison matters for Thailand's issuers. A retail-accessible listing regime does not automatically translate into asset gathering when investors already hold exposure through other channels and venues.

What happens after Friday?

The rules take effect this week, but the first Thai crypto ETFs will trade only after the SEC approves products and issuers complete custody and distribution setup. The pace of filings from MFC and ONE Asset Management over the coming months will signal whether Thailand's ETF market scales toward Hong Kong's $733 million or stays closer to Butterfill's tens-of-millions starting point.