30.11.2021

German investment funds can now invest up to 20% of portfolios in cryptocurrency

On July 1, a law came into force in Germany, giving the right to investment funds to invest in products focused on the cryptosphere. Now more than € 400 billion can be channeled into digital assets.

The fund allocation law was introduced in April and soon approved by the country’s parliament. Thanks to him, special funds (Spezialfonds) can invest up to 20% of their portfolios in cryptocurrencies. This amount was calculated by Sven Hildebrandt, CEO of Distributed Ledger Consulting.

“This is a very large amount. Around 1.2 trillion euros have been placed in special funds. They will not buy cryptocurrencies overnight, but we are talking about the largest investment resource in Germany – literally all the money is there, ”he said.

Special funds are investment funds aimed at institutional players and not intended for investments by ordinary citizens. Thus, they are the opposite of mutual funds. Typically, such funds manage assets of at least ten million euros, and the number of investors is limited to one.

It is expected that the example of Germany, as one of the largest economies in the eurozone, may be followed by other states. In addition, the new law will help increase Germany’s attractiveness as a crypto investment hub.

“The addition of cryptocurrencies to extrabudgetary funds is an important step for their distribution,” said earlier Bundestag member Frank Scheffler.

The law is moving in the right direction and we definitely welcome it. ”

The total number of funds for which investments in cryptocurrencies are now open is estimated at four thousand.

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