Family offices and private banks in Asia are throwing caution to the wind and lining up cryptocurrency investments for clients.
According to Ville Oehman, crypto fund manager at Helvetic Investments, there is ample interest from these firms for his new fund, which began taking in money this week.
‘For the past one year, I know that private bankers are getting an increasing amount of calls from clients for how to invest in cryptocurrencies and there really hasn’t been anything that these private bankers can offer,’ Oehman told Citywire Asia.
‘They have to say that they don’t recommend it or they would try to refer something else. Now, they have a professional investment vehicle.’
The open-ended Cryptocurrency Balanced Large Cap Fund SP fund, which will be soft closed at $200 million based on response during the initial subscription period, has won a capital markets licence in Singapore and will be audited by KPMG.
A quarter of the investments will be in equities of listed companies that are investing in or utilising distributed ledger technology, as well as US Treasuries to provide liquidity.
The rest of the investments will be in the top 10-15 cryptocurrencies by market capitalisation, bought over-the-counter or via regulated exchanges in Japan, Korea, US and Europe.
It is the first institutional grade, diversified crypto investment fund launched from Asia. The launch comes during a surge in Bitcoin’s price to over $11,000. Rival cryptocurrency Ether has quietly gained over 5000% since last year, currently trading at $469.11.
Even as investors and academics question the foundation of digital currencies, crypto-dedicated hedge funds, exchange-traded funds and even fund-of-funds have sprouted globally for a market that reached $349 billion this month, according to coinmarketcap.com.
Chicago’s largest derivatives exchanges CME Group and Chicago Board Options Exchange have both announced that they will begin trading bitcoin futures within the next seven days, allowing hedge funds to begin shorting cryptocurrencies.
‘Now the market is reaching a size and maturity level where institutional investors can get into this,’ Oehman said. ‘The market size and exchanges are liquid enough for serious, largescale investment.
‘Also fund structures like ours are possible because banks, auditors and fund administrators are getting ready to be service providers for regulated funds like ours,’ he added.