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‘Physical’ Bitcoin Fund Approved in Singapore
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UAE Markets Regulator Approves Trading of Canadian-Based Bitcoin Fund on Nasdaq Dubai Stock Exchange
The Dubai Financial Services Authority (DFSA) – a financial regulatory government agency – has approved the first Bitcoin fund, a closed-end investment vehicle based in Canada, for distribution and offering to qualified investors in the Middle East region.
While the Bitcoin fund received approval from Dubai’s market regulator in June. It was listed on the Nasdaq Dubai stock exchange when it became the first digital asset-based fund serving the Middle East region.
Following its approval by the DFSA, the Bitcoin fund can list up to $200 million worth of units on the Nasdaq Dubai stock market. The approval, therefore, allows the first cryptocurrency-based product listed on a regulated platform to satisfy rising demand from institutional investors in the Middle East region.
The Bitcoin fund will be available to investors of all levels, from individual traders to institutional investors, such as big banks and other investment firms.
The fund aims to provide investors based on the region with exposure to Bitcoin, tracking daily price movements of the cryptocurrency in U.S. dollars, and long-term capital appreciation.
The Bitcoin fund, offered and run by 3iQ Corp, is a diversified portfolio of digital assets that invest in long-term holdings of Bitcoin, bought from over-the-counter (OTC) counterparties and Bitcoin exchanges.
3iQ Corporation group is the largest Bitcoin and digital asset fund management firm in Canada.
Frederick Pye, the Chairman and CEO of 3iQ Corp, talked about the new development and said:
“Since we listed The Bitcoin Fund on the Nasdaq Dubai, we have seen an ever-increasing appetite from the large regional institutional investors. With the ability to now execute significantly larger sale offerings we anticipate that this will help to further grow the fund in the region.”
Pye further added that “at the time of the Middle East launch, the price of Bitcoin was around the $33,000 mark – which from an investor standpoint we felt was a great entry point into the market for our Middle Eastern investors.”
Based on its commitment to embrace fintech, Nasdaq Dubai is the first official stock exchange in the Middle East to provide such a new innovative investment service.
The Dubai Financial Services Authority (DFSA) is trying to establish itself as an innovative regulator for the Middle East region, focusing on innovative financial solutions and new technology to boost economic growth in the area.
The UAE Enjoys Crypto-Friendly Jurisdiction
Dubai has become a more cooperative environment for crypto investments. As a result, investors in the Middle East are beginning to get familiar with cryptocurrencies following the introduction of regulations that allow investors to invest a portion of their funds in the new asset class.
Earlier this week, the DFSA introduced a regulatory framework for investment tokens as part of its commitment to promote the digital financial and technological environment while meeting market players’ demands and requirements.
As reported by Blockchain.News in March, the DFSA called on members of the public to submit comments and views in its proposed rules for crypto assets considered security tokens.
The financial market regulator designed the token investment framework to protect the interests of investors and offer legal certainty for market operators.
Image source: Shutterstock
Wells Fargo Rolls Out Passive Bitcoin (BTC) Fund
Wells Fargo and JPMorgan have both submitted separate filings to the Securities and Exchange Commission (SEC) on August 19, 2021, for the launch of a passively-managed Bitcoin fund that will offer their wealthy clients exposure to bitcoin (BTC).
Wells Fargo Finally Joins the Bitcoin Movement
After several months in the works, Wells Fargo, the 16th-largest lender in the world, has finally launched its Bitcoin fund. Contrary to earlier reports, the new investment vehicle is a passive bitcoin fund designed to offer its wealthy and institutional clients indirect exposure to the digital currency.
As stated in its Form D filing with the U.S. Securities and Exchange Commission (SEC), the 169-year-old bank has inked a partnership deal with New York Digital Investment Group (NYDIG) and FS Investments, a Philadelphia-based asset manager on the offering.
What’s more, Wells Fargo will get an undisclosed percentage from sales of the fund through two of its subsidiaries: Advisors Financial Network and Wells Fargo Clearing Services, though the fund is yet to execute any transaction at press time.
As reported by BTCManager on August 3, JPMorgan partnered with NYDIG for the launch of its private bitcoin fund. The megabank officially registered its bitcoin fund via a Form D Exempt Offering of Securities filing on August 19.
Traditional Banks Seriously Embracing Crypto
Since the United States Office of the Comptroller of the Currency (OCC) gave federally chartered banks and financial institutions in the region the go-ahead to offer crypto custodial services, more and more banks have been making inroads into the cryptospace.
While HSBC, one of the world’s largest banks, recently barred its clients from purchasing the shares of MicroStrategy, a publicly-listed company with the largest bitcoin holding globally (over $3 billion), as a sign of its distaste for the revolutionary digital asset, other banks in its class have completely embraced bitcoin despite the lack of regulatory clarity still plaguing the industry.
As reported by BTCManager in July 2021, America’s oldest lender, Bank of New York Mellon (BNY Mellon), joined forces with State Street Corporation, and four other highly reputed firms to launch a new cryptocurrency exchange called Pure Digital.
In the same vein, on July 14, 2021, BNY Mellon signed a partnership deal with Grayscale, to enable the former to function as the asset servicing provider for the Grayscale Bitcoin Trust (GBTC).
At press time, the bitcoin (BTC) price is hovering around $47,111, with a market cap of $885.30 billion, according to CoinMarketCap.
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M3Sixty Files For “Risk-Managed” Bitcoin Fund, Won’t Hold Bitcoin
Instead of holding BTC, the IDX Risk-Managed Bitcoin Fund will invest in futures contracts and engage in high-frequency trading.
Financial services firm M3Sixty recently filed with the U.S. Securities and Exchange Commission (SEC) to launch the IDX Risk-Managed Bitcoin Fund. The fund will invest mainly in bitcoin futures contracts and pooled investment vehicles to achieve its objective of capital appreciation over time.
However, the filing details that the fund does not seek exposure to the bitcoin spot price and thus will not invest directly in BTC or popular over-the-counter investment vehicles such as the Grayscale Bitcoin Trust (GBTC). Instead, the fund will use a proprietary quantitative statistical model to engage in high-frequency trading of bitcoin futures contracts, resulting in a portfolio turnover of over 100% while seeking to increase its capital in dollar terms.
Additionally, M3Sixty expects the fund to hold significant amounts of cash, as well as U.S. government securities and other investment-grade fixed-income securities to provide liquidity and serve as collateral for the futures contracts. But M3Sixty doesn’t plan to hold contracts with maturity periods longer than 90 days, the filing said.
High-frequency trading not only goes against the Bitcoiner HODL mentality but also entails indirect exposure to bitcoin. M3Sixty, by not committing to purchase and hold BTC directly, effectively distances itself from Bitcoin and might end up not providing a good alternative for bitcoin exposure. The fund at least makes it clear that it doesn’t seek to become one.
Focused on the long term, Bitcoiners have grown accustomed to buying BTC in a wide range of prices while the currency undergoes its monetization path, sometimes buying the bottom and other times buying the top. Nonetheless, dollar-cost-averaging (DCA) has been demonstrated to be the most effective investment strategy with bitcoin. While traders choose to apply fancy models to predict the future, the patient DCA army will slowly drive a $1 million bitcoin price, eating up supply and ensuring true financial transformation for the people – beyond mere dollar profits.
HRF’s Bitcoin Development Fund Round Raises $210k for Bitcoin Projects
Six Bitcoin projects will receive funds from the Human Rights Foundation (HRF) to propel their growth. The Bitcoin Development Fund’s latest round totals $210,000 and is directed to three Bitcoin Core contributors, two Lightning Network wallet teams, and an Arabic translator.
HRF’s Bitcoin Development Fund
The donations for this round, including the support from Anthony Pompliano’s Bitcoin Pizza Day sales and Cygni Capital, were led by Jaewoo Cho, assistant professor at Hansung University and an anonymous crypto investor, RenoHQ.
Calvin Kim, Dhruv Mehta, and Abubakar Nur Kahlil, Bitcoin core contributors, will each be awarded $50,000; $25,000 will be picked up by the Breez and Sphinx wallet teams, and Arabic_HODL will get $10,000.
Kim will make use of the funds for Utreexo, a node-scaling project that takes Bitcoin’s history of transactions and displays them in a kilobyte of data, lowering the time and effort required to bootstrap the Bitcoin’s backbone node software.
Seeking a Global Reach
Based on Bitcoin Improvement Proposal 318, Mehta will keep working on security for Bitcoin to limit vectors for Sybil attacks on Bitcoin nodes. In his home country Nigeria, where Bitcoin’s acceptance is growing in response to policy bribery and capital restriction, Kahlil will work on a wallet purpose-built.
Sphinx Chat, a wallet and encrypted message service for Lightning Network users that enables them to chat through the network, will utilize its grants to create a directory for its users to connect with humanitarian activists.
Breez, another Lightning Network wallet, will utilize its money to develop its encrypted chat capabilities and improve node backup support.
Meanwhile, Arabic _HODL will keep up its work of translating Bitcoin content into Arabic.
Bitcoin Development Funds A Year Later
It may be the HRF’s diversified and worldwide round with recipients from Korea, Nigeria, the Middle East, and others. Bitcoin developers, journalists, and other community members were given grants last year, and over $800,000 has been granted in Bitcoin to 18 beneficiaries and projects since its start in May last year.
Also heavily donated to bitcoin developers and other community members in the past year were Square Crypto, BitMEX, Kraken, Gemini, and other Bitcoin and crypto companies. These grants can be a financial lifeline for coders that previously have been free to work on Bitcoin’s software for an open-source ecosystem, like Bitcoin.
In March this year, HRF received a wave of donations for the Bitcoin Development Fund. These donations supported Bitcoin development, a privacy newsletter, an open-source wallet, new user education, and internships for students.
Notably, all funds to the Bitcoin Development Fund in USD or BTC are used to improve the Bitcoin network. 95% of the funds go directly to the chosen developers, while the remaining 5% support HRF’s human rights advocacy mission.
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Digital asset manager behind Canada’s first BTC fund hopes to launch Bitcoin ETF
Investment fund manager 3iQ has partnered with Coinshares to launch a Bitcoin exchange-traded fund in Canada.
According to an announcement from 3iQ, the firm has filed a final prospectus for a Bitcoin (BTC) exchange-traded fund, or ETF, with the securities regulatory authorities in each of the 10 provinces and 3 territories of Canada. Pending regulatory approval, trading for the ETF is expected to begin in early April on the Toronto Stock Exchange.
CoinShares CEO Jean-Marie Mognetti said the joint effort was aimed at “making digital assets more accessible to investors of all types.” The fund’s units will likely trade in U.S. dollars under the ticker “BTCQ.U” and Canadian dollars under the ticker “BTCQ.”
Canadian investment firms have largely taken the lead on launching crypto ETFs in North America given the U.S. Securities and Exchange Commission’s, or SEC’s, seeming reticence in approving a fund. Toronto-based Purpose Investments launched a Bitcoin ETF in February, and Ninepoint Partners is reportedly planning to change its Bitcoin trust offering to an exchange-traded fund as well. Evolve Funds Group also announced in March that it had filed a prospectus with Canadian regulators for approval to begin trading an Ether ETF.
3iQ was behind the launch of Canada’s first Bitcoin fund in April 2020. The fund has since reached more than $1 billion, with Coinshares and 3iQ having a combined $7 billion of assets under management.
“We have followed 3iQ’s incredible growth closely since they received a landmark decision in Canada to allow listed Bitcoin vehicles,” said Mognetti.
Southeast Asia Gets its First Bitcoin Fund to Address Growing Institutional Demand
The first bitcoin fund in the Southeast Asian region, the BCMG Genesis Bitcoin Fund, otherwise known as BGBF-1, recently launched to cater to accredited institutional investors.
Bitcoin Fund for Asian Institutional Investors
According to a press release on Monday (Mar. 8, 2021), the new bitcoin fund which aims to cater to institutional demand for cryptocurrency seeks to leverage on the continuous growth of the number one crypto asset. Apart from being the first insured bitcoin fund in Southeast Asia, BGBF-1 would be regulated in Labuan, Malaysia.
The fund uses an Artificial Intelligence (AI) powered blockchain-based platform, which is provided by CGCX.io, an insured cryptocurrency exchange. The crypto exchange’s infrastructure helps to safeguard customers’ assets from hacks and attacks.
Also, Hong Kong-based company Alpha Calibration would provide regulatory compliance services, while HLB Hodgson would be the fund’s auditor. In addition, IBH Investment Bank based in Labuan is the bitcoin fund’s main advisor.
Meanwhile, as part of efforts to ensure security, accredited investors interested in the fund must undergo Anti-Money Laundering (AML) and Know Your Customer (KYC) screening procedures.
Speaking on the new bitcoin fund, Subbu Vempati, the Fund Manager, said:
“BGBF-I is a secure, insured and regulated platform where investors can get exposure to the Digital Assets industry. Investors get to benefit from our expertise in the financial, technical and security aspects of Bitcoin investments, as well as enter this class with a peace of mind without any challenges or risk in directly handling the Digital Asset.”
Indeed, institutional interest in bitcoin has been the major cause for the crypto’s upward trajectory. Big wigs such as Tesla, made headlines earlier in 2021 after the company made a $1.5 billion bitcoin investment. Other major firms such as Microstrategy and Square also increased their BTC holdings.
Institutional Interest in Bitcoin Remains Strong
The surge in institutional demand for bitcoin has led to the launch of various bitcoin funds and exchange-traded funds (ETFs). As previously reported by BTCManager, Canadian regulators approved the third bitcoin ETF issued by CI Global Asset Management.
The first North American physically-settled bitcoin ETF, the Purpose Bitcoin ETF, was launched in Canada back in February 2021, which garnered over $400 million in assets under management in two days. In the same month, Canada got its second bitcoin ETF dubbed the EBIT ETF.
Also, Canadian firm Ninepoint Partners unveiled a Bitcoin Trust to offer institutional investors exposure to the flagship crypto asset. Grayscale Bitcoin Trust (GBTC), which is the world’s largest bitcoin fund, has total assets under management at $33.2 billion.
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Southeast Asia’s first Bitcoin fund launches to meet local institutional demand
The Malaysia-based BCMG Genesis Bitcoin Fund-I, or BGBF-I, has officially launched, claiming to have become the first insured institutional crypto product available in the Southeast Asian region.
An announcement states the fund launched in response to a growing demand for institutional crypto products in Southeast Asia. The fund leverages an Artificial Intelligence (AI) powered blockchain-based platform provided by Calfin Global Crypto Exchang, which purports to offer increased security for customer holdings.
BGBF-I is regulated in Labuan, Malaysia, where IBH Investment Bank serves as the fund’s main advisor. Professional financial services provider, Hong Kong-based Alpha Calibration, will provide regulatory compliance services, and be audited by HLB Hodgson.
The investment vehicle also offers insurance coverage and underwriting for Public Offering Security Insurance. Fund Manager, Subbu Vempati explained:
“BGBF-I is a secure, insured and regulated platform where investors can get exposure to the Digital Assets industry. Investors get to benefit from our expertise in the financial, technical, and security aspects of Bitcoin investments, as well as enter this class with a peace of mind without any challenges or risk in directly handling the Digital Asset.”
According to its official website, the BGBF-I Fund projects a minimum return of 12% per year, while noting that BTC itself has gained 266.5% over the past 12 months.
All accredited Asian investors must go through mandatory Anti-Money Laundering (AML) and Know Your Customer (KYC) screenings to access the fund.
The Bitcoin fund is one of many that have been recently launched to address growing institutional appetites BTC and other digital assets. In mid-February, the first physically settled North American Bitcoin ETF was approved in Canada. Grayscale’s Bitcoin Trust also continues to grow, with its assets under management recently