Asian institutional investors, mostly high-net-worth individuals and family offices unfamiliar with digital assets, are increasingly showing interest in allocating a small portion of their portfolios to crypto hedge funds.
Unlike in the past, some have actually taken the plunge and made such allocations, while more are likely to follow, industry experts say.
The rub is that, like in other parts of the world, a crypto-averse banking sector and regulatory requirements pose high hurdles to launching such funds, and hence wider institutional adoption, in Asia.
This year has been a crucial turning point for BBShares, a Hong Kong-based crypto hedge fund catering to institutional investors in Asia. The firm is on track to reach committed capital of $10 million before year-end, mostly from high-net-worth individuals and family offices, while traditional financial institutions remain on the sidelines.
Most of the capital came in during the past four months after news of Facebook’s Libra project and bitcoin’s bull run since early this year piqued investors’ interest.
“The pace of [institutional] investor allocation to crypto this year has been much faster,” said Jett Li, chief investment officer at BBShares who formerly worked at Bank of New York Mellon. “Demand for secure and efficient institutional asset allocation into crypto is quite strong.” Read More...