Thailand’s Securities and Exchange Commission (SEC) has been actively advancing regulations to integrate digital assets more deeply into its financial system.
Thailand approved its first spot Bitcoin ETF in 2024 initially for institutional investors. By late 2025, the SEC announced plans to broaden this to include other cryptocurrencies like Ethereum and potentially diversified “basket” products.
Finalized rules for these expanded crypto ETFs, along with operational guidelines like custody, liquidity, and collaboration between asset managers and licensed exchanges, are targeted for early 2026 rollout.
The regulator is working to recognize digital assets as a formal asset class under the Derivatives Act, enabling crypto futures on the Thailand Futures Exchange (TFEX). This adds derivatives-based exposure and hedging options for investors.
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New regulations support tokenized assets such as real-world asset tokenization like securities, carbon credits, or renewable energy certificates, opening doors to innovative, blockchain-based investment vehicles beyond pure cryptocurrencies.
Thailand introduced a five-year personal income tax exemption through 2029 on capital gains from crypto trades on licensed platforms, aimed at attracting investors. The SEC promotes digital assets as a diversification tool, suggesting allocations of 4-5% for higher-risk-tolerant portfolios.
Additional initiatives include tokenization sandboxes and positioning crypto as part of sustainable finance. These measures collectively aim to attract institutional capital, enhance investor access through regulated traditional finance channels, and reduce direct custody risks.
The strategy competes with hubs like Hong Kong and Singapore while emphasizing regulated, mainstream integration over speculation. This positions Thailand as a progressive, regulated gateway for digital asset exposure in Southeast Asia, potentially influencing neighbors like Vietnam, Malaysia, and Indonesia.
Recent reports from January 2026 highlight this acceleration, with the SEC centering digital assets in its 2026 capital market plan. The statement describes a market dynamic often seen in derivatives, futures, or cryptocurrency trading, particularly during crises involving short squeezes, liquidations, or settlement failures.
In normal trading, participants (buyers and sellers) are price-sensitive—they seek good deals and avoid overpaying. However, when “forced settlements” occur, certain parties become price-insensitive buyers. They must acquire the asset immediately, regardless of cost, to meet obligations.
This happens in these key scenarios: Cryptocurrency exchanges facing a “settlement squeeze”: If an exchange has issued more “paper” claims than actual coins held in reserves, and users demand withdrawals during a crisis, the exchange faces a shortfall.
To avoid default, insolvency, or legal consequences “to stay out of jail” as some analysts put it, the exchange rushes into the open market to buy the missing coins at any available price. This turns them into aggressive, price-insensitive buyers, driving sharp upward price spikes—often non-linear or explosive rallies not tied to organic adoption but to forced covering.
Recent commentary highlights this in Bitcoin contexts: rallies stem from these squeezes when spot vs. paper imbalances force exchanges to cover urgently, potentially causing 5–10x jumps in extreme cases.
Stock or equity markets.
The exchange or counterparty acts as a “forced buyer” who is price-insensitive because they must settle—leading to premiums and upward pressure, especially in illiquid stocks. In leveraged markets (crypto perps, commodity futures), sharp price moves trigger margin calls and forced liquidations.
For shorts, this means forced buying to close positions, which can cascade upward if many shorts liquidate simultaneously. While exchanges themselves rarely become direct buyers here, brokers or clearing members may step in aggressively if needed to manage risk, amplifying buying pressure.
In all cases, the key shift is from voluntary, price-aware trading to compelled, urgency-driven buying—removing normal downward price pressure and creating rapid, amplified moves higher. This mechanic explains sudden “inexplicable” pumps in volatile markets like crypto, where structural fragilities turn routine events into explosive squeezes.