South-East Asia sees its first insured Bitcoin ETF launch as demand for cryptocurrencies from institutions increases.
Another One, In Another Place
A Malaysian Bitcoin exchange-traded-fund (ETF) will be the first insured fund to launch in the South East Asia (SEA) region. The launch comes as the first in the region, which sees growing institutional interest in the cryptocurrency space.
The fund, named BCMG Genesis Bitcoin Fund-I (BGBF-I), will also offer investors insurance. This acts as an additional safety-net for investors who decide to invest in Bitcoin (BTC), an already extremely volatile asset.
Indeed, managed cryptocurrency ETFs already offer some risk management features; they provide limited exposure to cryptocurrencies by their very nature.
In BGBF-I’s case, Hong-Kong-based regulatory compliance company, Alpha Calibration, administers the fund. Moreover, HLD Hodgson, also based in Hong Kong, provides regular audits.
Moreover, IBH Investment Bank, based in Lauban, Malaysia, will act as the fund’s principal advisor.
“Our strategic partnership with BGBF-I will focus on corporate and financial advisory as well as support our mission to gain a competitive advantage and positioning in Asian Investment banking operations.”IBH Investment Bank
Bitcoin ETFs Are In
In what may seem like an ETF-style gold-rush, cryptocurrency-ETFs are both launching and attracting large amounts of capital in quick succession.
Towards the end of last month, a Canadian company, Purpose Investments, launched its first Bitcoin ETF and the first in North America. Called the Purpose Bitcoin ETF, Ernst and Young (EY), a respected multi-national company, audits the fund.
Like its SEA counterpart, the Purpose Bitcoin ETF is a response to the growing institutional demand for cryptocurrencies in Canada. Accordingly, within just two days, the fund attracted over $400 million in Assets Under Management (AUM).
The Purpose Bitcoin ETF is currently available to purchase on the Toronto Stock Exchange (TSX).
The Future? Or Short-Term?
With this sudden and extraordinary level of interest, the question arises: will the momentum pass, or is it just beginning?
For ETFs specifically, data are starting to indicate that investors may actually be starting to purchase cryptocurrencies directly. The Grayscale Bitcoin Trust (GBT) – a Bitcoin ETF operated by Grayscale Investments – turned negative.
This means the fund’s price was such that the BTC within it was lower than BTC’s market rate. Normally, this might indicate selling pressure in the market overall.
However, as the market has since appreciated and the GBT remained negative, it suggests those same investors might be opting for direct custody of their BTC.
Notwithstanding the wider market’s surge, ETFs might only be a passing trend, though now investors in the SEA region have the option.