Cryptocurrency News

Germany’s new law allows institutional funds to invest in cryptos

  • Germany’s new law allows institutional investors to access cryptocurrencies
  • The law will allow Spezialfonds to invest up to 20% of their portfolio in cryptos
  • Cryptocurrency adoption continues to grow globally

Bitcoin’s adoption by institutional investors has been extensive in the past year. With the cryptocurrency gaining more recognition, more institutional investors are looking to gain exposure to Bitcoin. Namely, Germany has approved a new law that would allow thousands of institutional funds to invest in cryptocurrencies.

Germany opens up institutional investors to cryptocurrencies

Germany has approved new legislation that would allow over 4,000 institutional investment funds to gain access to cryptocurrencies. As such, the law would allow the investors to allocate up to 20% of their portfolio to Bitcoin and other cryptocurrencies.

The institutional investment funds, called Spezialfonds, can invest in cryptocurrencies starting July 1. Germany’s federal parliament, the Bundestag, approved the law, and it is set to be cleared by the country’s Federal Council as soon as possible.

Indeed, cryptocurrency experts in Germany believe this is a step in the right direction. Admittedly, this latest development will help Europe’s largest economy maintain its position as a leading financial investment hub.

German parliamentarian Frank Schäffler said the addition of cryptocurrencies in Spezialfonds would help in the acceptance of the new assets. “Here, the law is going in the right direction, and we expressly welcome it,” he added.

In addition, Sven Hildebrandt, CEO of Germany-based Distributed Ledger Consulting (DLC) expressed excitement with this latest development. He noted the high number of institutional investors that can now invest in Bitcoin and other cryptocurrencies.

Hildebrandt pointed out that the Spezialfonds control roughly $1.8 billion in assets under management. That is, they currently have zero percent invested in cryptocurrencies. In short, by investing up to 20% in cryptos, the market will benefit immensely. He noted that theoretically, up to $422 billion would enter the cryptocurrency space if the Spezialfonds invest in the market.

Institutional investors globally are clamoring for cryptos

Although several institutional investors are still cautious regarding cryptocurrencies, an increasing number of them are seeking direct and indirect access to the emerging asset class. Over the past year, institutional investors have added billions of dollars into the market, helping Bitcoin set a new all-time high above $63,000.

In final analysis, the adoption is set to grow as more countries recognize cryptocurrencies as investment vehicles. Clearly, this will help provide safe and regulated ways for investors to gain access to them.

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