Crypto market expects a significant flow of institutional investment from Germany
Starting next week, a flood of institutional investments could follow from Germany. On Monday, Aug. 2, a law comes into force that allows German institutional investors - in the Spezialfonds category - to invest in bitcoin (BTC) and other cryptocurrencies.
Institutional players such as pension funds and insurers can access these funds. Together, these institutional players in Germany manage a staggering 1.8 trillion euros ($2.1 trillion). The regulatory environment for cryptocurrencies is rapidly evolving, and more and more institutional players are joining this market.
Crypto market expects a significant flow of institutional investment from Germany
However, despite the rapid growth of the cryptocurrency market this year, lawmakers are still slow to formulate new regulations for cryptocurrencies. Speaking about this development, Tim Kreuzmann, a crypto-asset expert in the British Virgin Islands, an organ of the German stock industry, 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 cryptocurrency."
There is no doubt that digital currencies have generated huge profits over the past decade, but the extreme volatility of the market prevents institutional players from joining them. Such players tend to be conservative about investing in assets with sustainable returns.
Kamil Kaczmarski, a financial services advisor at consulting firm Oliver Wyman LLC, said initial participation in crypto funds may be at a low level.
Kamil Kaczmarski, a financial services advisor at consulting firm Oliver Wyman LLC, said initial participation in crypto funds may be at a low level.
DWS Group, Deutsche Bank AG's asset manager, is constantly watching the crypto industry for developments. But a spokesperson confirmed that they do not currently plan to offer cryptocurrency-related funds. Another popular German asset manager, DekaBank, was ready to enter the cryptocurrency market, and an announcement could be made soon.
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