Germany allows institutional funds to keep up to 20% in crypto
We could be seeing a flood of institutional investments coming from Germany starting next week. A special law is coming into effect on Monday, August 2 that allows Germany’s institutional investors to invest up to 20% of their totals in Bitcoin (BTC) and other cryptocurrencies via their Spezialfonds. The law was passed in April and initially planned to come effect July 1.
Institutional players like pension funds and insurance companies have access to these funds. Combined, institutional investors in Germany manage a massive 1.8 trillion euros ($2.1 trillion). Considering the total assets under management of all Spezialfonds in Germany, a full 20% allocation would come down to a total of $415 billion entering the crypto market.
The regulatory landscape for crypto is rapidly changing and we keep seeing institutional players joining the game.
Nonetheless, with the crypto boom of this year, lawmakers are still taking a conservative stance when it comes to the regulation of cryptocurrencies. Speaking about this, Tim Kreutzmann, an expert on crypto-assets at BVI, Germany’s fund industry body told Bloomberg:
“Most funds will initially stay well below the 20% mark. On the one hand, institutional investors such as insurers have strict regulatory requirements for their investment strategies. And on the other hand, they must also want to invest in crypto.”
Kamil Kaczmarski of management consulting firm Oliver Wyman LLC, said that the firm expects the initial participation in the crypto funds to be at a low level. Their expectations that it will take at least five years to come close to the 20% threshold. He added that German institutions are traditionally conservative and can be reluctant due to the volatility of crypto assets.
While DWS Group, the asset manager for Deutsche Bank AG, confirmed that they do not plan to get exposed to crypto, Germany’s largest asset manager, DekaBank seems to be ready to move in and is expected to make an announcement soon.
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Source: igaming
