New legislation enabling 4,000 Spezialfonds to invest in crypto assets becomes law in Germany on July 1.
Spezialfonds are favored by institutional investors, and interest in them is now exploding, according to analysts.
In Germany, new legislation enabling managers of the most popular institutional investment funds—the so-called Spezialfonds—to allocate 20% of them to crypto-assets is set to come into force on July 1.
The measure has been hailed as a big boost to Germany’s position as a financial investment hub, and experts believe it will nurture the crypto industry as a whole by further legitimizing the asset class.
“The addition of crypto assets in Spezialfonds is an important step for their acceptance,” German parliamentarian Frank Schäffler told Decrypt. “Here, the law is going in the right direction and we expressly welcome it,” he added.
The law cleared Germany’s federal parliament, the Bundestag, last Thursday, and is due to be rubber-stamped by the country’s Federal Council imminently. It will apply to both existing Spezialfonds and to new ones set up by institutional investors such as financial institutions, insurance companies, and pension funds. In all, around 4,000 existing investment funds will now be eligible to invest in Bitcoin and other crypto assets, Sven Hildebrandt, CEO of Germany-based Distributed Ledger Consulting (DLC) told Decrypt.
“This is damn huge,” Hildebrandt said. Around €1.2 trillion ($1.8 trillion) is invested into Spezialfonds, which have fixed investment conditions, and “right now, 0% of the funds are invested [in cryptocurrencies], because they’re just not allowed.”
Hildebrandt has lobbied for over two years to update the legislation in this area, alongside BVI, the nation’s Asset Management Association. When the new regulations become law on July 1, if Spezialfonds (excluding those designed purely for physical assets—around a third) choose to place even a 1% fund allocation in crypto, the impact on the crypto industry would be enormous, he said.
“This won’t happen overnight, but we are talking about the largest investment vehicle that we have in Germany—literally all the money is in there,” he said. Theoretically, up to €350 billion ($422 billion) could enter the crypto market from Spezialfonds alone, he explained. (For comparison, Bitcoin’s current market cap is $1 trillion.)
Institutional crypto investment vehicles in Germany
There is no United-States equivalent to Spezialfonds, but they’ve been likened to the Special Investment Funds (SIFs) in Luxembourg, and Qualifying Investor Funds (QIFs) in Ireland. These types of investment vehicles are attractive to institutions because they allow for flexibility and are much less restrictive in requirements for liquidity, diversification, restrictions on borrowing, and leverage. Simultaneously, a robust regulatory framework provides assurance for investors.
Now, the funds are set to become the latest addition to the tools institutions have at their disposal enabling them to buy into digital assets without purchasing actual cryptocurrency—thus circumventing the need to deal with crypto exchanges or digital wallets.
Germany’s bold moves follow its introduction of law at the beginning of 2020 allowing banks to sell and store cryptocurrencies.
Financial Services company ETC Group became the first to launch a Bitcoin ETP on the German stock exchange in 2020, after Germany’s financial regulator, BaFin, recognised cryptocurrencies as financial instruments.
Since then, Bitcoin exchange-traded funds (ETPs) have proliferated on Germany’s exchanges, with crypto-asset management firm Iconic Funds due to list its Bitcoin ETP this week. Leading fund administrator State Street will serve as the administrator of the upcoming ETP, in a first for the international bank. Fidelity Digital Assets and Coinbase Custody will be the custodians.
The Frankfurt-based startup is a joint venture between crypto-asset management group Iconic Holding and Cryptology Asset Group, which was founded by legendary entrepreneurs Christian Angermayer and Mike Novogratz.
“There is massive and rapidly growing demand from all sorts of investors who want to access crypto assets,” said Michael Geister, Iconic’s Head of Crypto ETPs, noting that the European market for crypto ETPs has grown to over $5 billion in assets under management “in a short period of time.”
Hildebrandt believes crypto-enhanced Spezialfonds could be even bigger, and said interest from institutions in them is “exploding.” Germany, he explained, is a country that is very keen on regulatory compliance.
If this “insane” interest bears out and all the eligible funds were to invest their full 20% allocation in Bitcoin, that would constitute around a third of the crypto asset class’s current market capitalization. That, however, is an extreme case—“which will never ever happen,” he said.
Crypto analytics firm Coin Metrics has raised $15 million in funding led by investment bank Goldman Sachs. Founded in 2017, the firm is planning to use the funding proceeds to grow in Europe and Asia, creating new products while expanding its current offerings.
Coin Metrics Raised $15 Million Led by Goldman Sachs
Coin Metrics, a crypto data provider to institutional clients, has raised $15 million through investors led by Goldman Sachs Group, according to an announcement from the company. The Series B financing will be used to expand on the company’s global expansion.
Coin Metrics provides cryptocurrency market data, feeds, indices, and network risk solutions with clients such as Fidelity Investments, Osprey Funds, and BlockFi.
BlockFi, Acrew Ventures, Morningside Group, and Warburg Serres Investments also participated in the funding round. While Castle Island Ventures, Highland Capital Partners, Fidelity Investments, Avon Ventures, Communitas Capital, and Collab+Currency each contributed to their respective stakes in the company.
The managing director at Goldman Sachs, Mathew McDermott, will be serving on Coin Metrics’ board of directors.
“Data is critical for the mainstream adoption of crypto assets by traditional investors and financial services players. Our clients will greatly benefit from Coin Metrics’ institutional-grade data insights and emerging risk management tools,” he adds.
Goldman Sachs Shows Interest in Bitcoin
Goldman Sachs has been showing an increased interest in Bitcoin this year. In mid-March, the investment bank filed with the U.S. Securities and Exchange Commission for launching a Bitcoin exchange-traded fund (ETF). Besides, a month later, it announced that it would soon offer bitcoin investment vehicles to its clients.
On leading Coin Metric’s investment round, Marianna Lopert-Schaye, firmwide strategy at Goldman Sachs, said:
“We are excited to be leading their (Coin Metrics) Series B, thereby enabling their growth and supporting their mission to be the leading provider of data-driven market insights and intelligence for institutions in crypto.”
This week we are celebrating our 7th year in business! Crazy to think of the growth in the industry even since last year. Let’s take a look back at the price of Bitcoin since May 2014 when Coinigy launched:
2020 was a challenging year for us all but the Coinigy team put our heads down and kept chipping away at our vision for V2. As you can see above, this bull run is not the first bull run that we have been through, and we are sure it won’t be the last. Even though this one may feel different, our focus and determination to continue building the best cryptocurrency application in the industry remains the same.
Enter code CoinigyTurns7 at check out to redeem this offer. Limit one per customer, not redeemable on CryptoFeed subscriptions. Offer expires May 7, 2021 at 11:59 CST. Must be paid using PayPal or Credit card.
As always, none of this would be possible without loyal Coinigy users that have been with us on this journey from $230 to all the way to the ATH of $64,000 and everything between – thank you for your endless support.
The Bank of England Is the “Victim” of Various Bitcoin-Related Slogans
Someone has a serious attitude against the Bank of England. Either that or they just hate banks in general and happen to live in England. Thus, they are taking their anger out on the nearest centralized financial institution. This week saw the Bank of England repeatedly hit with laser messages that bashed traditional monetary systems…
Someone has a serious attitude against the Bank of England. Either that or they just hate banks in general and happen to live in England. Thus, they are taking their anger out on the nearest centralized financial institution. This week saw the Bank of England repeatedly hit with laser messages that bashed traditional monetary systems while praising bitcoin.
The Bank of England Served as a BTC Billboard
Some of the messages read, “Fiat is the bubble, and bitcoin is the pin” and “Bitcoin fixes this,” implying that there are simply too many problems occurring in today’s monetary institutions and that bitcoin is the answer we have potentially been looking for. In addition to the Bank of England, messages were flashed across several other notable landmarks in the area such as the House of Parliament. Some of the other messages featured were, “Printing money is stealing from the poor” and “Money printer go brrrrr.”
As of late, there has been a great deal of hostility and anger towards how banks and political parties have been handling the coronavirus pandemic. While they may allegedly have their hearts in the right place by printing money constantly as a way of providing stimulus measures for suffering residents, many agree that the constant printing of fiat currency is only a short-term answer and could lead to even larger problems down the line.
For example, the constant printing of money could cause further inflation. In addition, the more stimulus measures are produced, the higher taxes go up in the future, which means many children – as they get older – will be stuck with the tax burdens these stimulus measures are likely to cause. While their parents are likely benefiting, it is their children that will wind up with the problem later, causing many people to ask the question, “Is this fair?”
Stimulus Measures Called Into Question
Furthermore, many of these stimulus measures are simply being produced on the front of trying to help residents who are suffering financially, though many of the stimulus bills passed in America, for example, are filled with superficial elements that serve no benefit to the country. Seriously… Why is the American Congress devoting tens of millions of dollars to gender studies in Pakistan? Especially when so many of the country’s businesses have shut down and people cannot pay their mortgages? Does this make any sense whatsoever?
The stimulus measures have been criticized by many leading financial experts including South African entrepreneur Elon Musk and billionaire investor Mike Novogratz, who says that Congress acts like money “grows on trees.” Either way, the person flashing the messages across the bank has yet to be identified, but it is clear they have great respect for bitcoin and seem to believe that the world’s number one digital currency by market cap can solve a lot more than even leading financial experts seem to give it credit for.
After facing tight resistance at $1.62, and following a re-test of the support of $1.41, XRP managed to breach above the aforementioned resistance at press time. With the asset moving back above $1.60, the price movement indicated a bullish behavior but the overall market structure may indicate the contrary.
At press time, XRP exhibited a market cap of $77 billion and its 24-hour trading volume was $15.8 billion.
XRP’s 12-hour chart currently indicated its position above resistance at $1.62, suggesting the potential to re-test its 2021 high at $1.966. However, the price structure of XRP showed a rising wedge pattern. This increases the chances of a bearish breakout in the next few days, but considering bullish momentum remains rigid, the price could move toward its next target at $2.30.
However, the chances of another re-test at $1.41 is likely higher, with trading volumes decreasing over the past few days as well. SSL indicator remains bullish for XRP, indicative of a buy signal in the chart but probable corrections will lead to a change.
Clear-cut bullish indicators are currently minimal with MACD being only slightly bullish at the moment. Bulls do not have an upper hand at the moment but Relative Strength Index suggested continued buying pressure at press time. However, the buying pressure may decrease as Awesome Oscillator suggested a decrease in bullish momentum.
At the moment, the market remains more neutral even though the price is seemingly rising in the 12-hour time frame.
According to Gann-Fan indicator, XRP exited a hyper-bullish position back on 21 April itself when the price moved below the 1:1 ratio line. Currently oscillating above the 2:1 line, it suggests that buying pressure is slowly decreasing in comparison to selling pressure, which is on a rise. To maintain its bullish outlook, the price needs to top $1.97 in the next few days, but it is more likely to head towards support at $1.31.