Regulated Bitcoin and Ethereum funds have launched in Hong Kong

Hong Kong-based Huobi Asset Management announced the launch of Bitcoin (BTC), Ethereum (ETH), and mining-related funds for professional investors yesterday, it said in a release shared with CryptoSlate.

“[We] offer professional investors the opportunity to build crypto ownership in a secure, reliable, and convenient manner via traditional fund products, which investors otherwise would have to face when directly purchasing cryptos,” explained Gillian Wu, CEO of Huobi Asset Management. 

“The funds launched are intended to cater to different types of investors with different risk profiles, and we are confident about the future growth potential,” he added.

The firm is a wholly-owned subsidiary of Huobi Technology Holdings, which runs the popular namesake crypto exchange and other products. Its offering is among the first in Hong Kong, a region that has, since the past few years, warmed up to institutional involvement in the crypto space.

An Ethereum fund for the first time

The new offerings include three crypto funds—of which two invest solely in Bitcoin and Ethereum—and a private equity fund for blockchain mining-related businesses, Huobi said.

As per the release, Huobi obtained the Securities and Futures Commission’s (SFC) approval in March 2021 that allows it to manage and distribute funds 100% invested in cryptocurrencies. The license made Huobi the second crypto fund manager to become recognized in Hong Kong.

Breaking: China's largest exchange Huobi has obtained a Hong Kong cryptocurrency fund license, and it will launch Bitcoin, Ethereum and multi-strategy funds on March 3. Similar to the Grayscale, this move by Huobi may promote traditional Asian investors to cryptocurrency field. pic.twitter.com/IIrhZVKiGQ

— Wu Blockchain (@WuBlockchain) March 4, 2021

Among the various new funds are a Bitcoin (BTC) tracker fund, an Ethereum (ETH) tracker fund, and a multi-strategy crypto fund.

The ‘tracker’ funds are passive—meaning they won’t be actively managed or traded—funds designed to mirror the performance of either Bitcoin or Ethereum. The multi-strategy fund, on the other hand, is an actively managed fund that is invested in a basket of diversified cryptocurrencies that offers investors the potential for greater returns compared to passive allocation. 

Both the Ethereum tracking fund and the multi-strategy fund are the first in this category of crypto investment products to be issued by a licensed fund manager in Hong Kong. 

Mining businesses in focus as well

In addition to the three crypto funds, Huobi is also offering a private equity fund that will make investments in crypto mining-related businesses, a market segment that has seen exponential growth over the past few years.

The will leverage its expertise to identify and invest in companies in the crypto mining ecosystem such as hardware manufacturers and mining pools.

Meanwhile, the funds come amidst a greater demand for crypto investments from institutional investors. Most of the investment action comes in from the US or Europe, in form of crypto funds, exchange-traded funds (ETFs), and other dedicated vehicles.

04/21/21 UPDATE: Net Assets Under Management, Holdings per Share, and Market Price per Share for our Investment Products.

Total AUM: $45.8 billion$BTC $BCH $ETH $ETC $ZEN $LTC $XLM $ZEC $BAT $LINK $MANA $FIL $LPT pic.twitter.com/gAujWHw5qQ

— Grayscale (@Grayscale) April 21, 2021

And while most demand is for Bitcoin, investors are dipping their toes in the Ethereum market as well.

US fund manager Grayscale’s Ethereum trust boasts over $7 billion worth of ETH under management, while Hong Kong-publicly listed firm Meitu became the world’s first company to hold Ethereum as part of its balance sheet earlier this year.

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