By Jamie G - Cryptocurrency Investor - 31-07-2021
As new legislation controlling German Spezialfonds comes into force, over $415 billion could be used for investing in cryptocurrency for institutional funds.
German institutional funds will hold in a crypto coin storage no more than 20% of their assets in cryptocurrencies as of the 2nd of August. With institutional funds finally able to hold crypto market investments, this could potentially provide further global adoption of Bitcoin (BTC) and cryptocurrency, even if it's just through pension investment accounts.
According to an article by Bloomberg, the latest German law modifies the pegged investment plan to allow more freedom on what to invest. The rules govern special funds (Spezialfonds in german), which hold and manage around $2.1 trillion in assets; the funds are only available to investment companies like institutions that run pension funds.
Reportedly, a worker from an investment funding group in Germany BVI, Tim Kreutzmann, has stated that the majority of funds will likely stay far below the 20% target at first. He further explains that insurers, pension funds and other institutional investors will have "strict regulatory requirements" when planning their investment strategy for their clientele. That being said, their customers must also want to invest in Bitcoin and other cryptos.
The new crypto bill signals a significant shift in the financial industry and how German legislators control digital assets. Germany's Federal Financial Supervisory Authority, or BaFin, advises that it's best to stay safe and cautious due to the unpredictable nature of investing in digital assets.