Germany plans to authorize certain institutional funds to invest billions of dollars in cryptocurrency assets for the first time.
- A law taking effect on Monday will allow so-called Spezialfonds with fixed investment rules to invest as much as 20% of their holdings in Bitcoin and other crypto-assets.
- The funds, which can only be accessed by institutional investors such as pension firms and insurers, now manage around 1.8 trillion euros ($2.1 trillion).
- Legislators worldwide have been slow to accept crypto assets, whose valuations have whipsawed, and such markets are dominated by a small number of investors.
- The move marks a change of the asset class into the mainstream and follows investments by influential names in the finance industry, including Alan Howard and Mike Novogratz.
The volatility of the crypto assets might not be attractive to conservative investors in Germany. Oliver Wyman LLC, a management consultancy firm, expects funds to experiment with cryptocurrencies at a low level.
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