Asia's crypto madness spurs on a number of fund structure

The crypto madness among Asian investors spurs on asset managers in the region to use opportunities to recover them with their products despite tightering regulations, Cerulli Associates states in a new report.

A number of cryptocurrency and Blockchain funds that invest in the broader universe without investing directly in cryptocurrency were introduced in Singapore, Hong Kong and Korea last year, while Australia saw the region's first exchange-traded funds with direct engagement in Bitcoin.

"For investors, the growing number of investment funds and ETFs that come onto the market contributes to expanding the product selection or even legitimizing crypto investments by offering more secure ways to access this investment class," said Ken Yap from Singapore Managing Director for Asia at Cerulli.

"Cryptofonds offer managers an important opportunity to collect assets," added YAP.

Regional regulatory authorities, however, have taken hard against the investment class, since the Monetary Authority of Singapore restricted the access of private customers to Krypto in August and the Thai stock exchange supervisory authority has revised the advertising rules for digital asset companies.

South Korea currently does not allow local players to tap the services of cryptocurrency exchanges.

This environment of increasing regulatory control and market volatility would be an "important sales argument" for asset managers when providing crypto -related funds and not by products that are directly connected to the investment class, said Yap.

The increasing regulation has not prevented Asian managers from looking for opportunities in this area, with a number of Korean companies take steps to expand their skills in the field of digital assets.

In January, the Korean Mirae Asset Financial Group announced plans to introduce a business for digital assets that initially aimed at custody services for cryptocurrency and not fungible tokens and finally creating loans and funds that are bound to digital assets, the Korea Economic Daily reported in the citing industry sources. This advance came in view of the increasing demand for such services.

KB Asset Management, South Korea's largest bank, announced in February that it set up a preparatory committee for the administration of digital assets to examine the development of digital assets and funds for artificial intelligence.

KB on the KB Global Digital a Chain Economy Fund, the first strategy in the country that focuses on investments in blockchain technology companies, in September last year.

Generation Z and Millennials fueled the interest in crypto in South Korea, said Cerulli.

Singapore also has a strong interest among young investors, whereby Cerulli quotes a survey from last year that showed that 51 percent of 25 to 44 year olds were more willing to invest in crypto, while only 36 percent of the over 45-year-old showed the same interest.

At the beginning of the year, BNY MELLON Investment Management prepared the laying down of Singapore's first retail-oriented fund that invests in the blockchain universe, in view of the growing interest of local investors in crypto assets and related technology.

Thailand and Vietnam have also emerged in view of a global market crisis and intensified regulations for the extremely volatile sector as breeding grounds for cryptocurrency investments in retail in Southeast Asia.

According to a report published on September 21, Thailand recorded a crypto value of $ 135.9 billion in the 12 months to June 2022, while Vietnam had $ 112.6 billion.

crypto also aroused the interest of wealthy private individuals, with Cerulli reporting that some private banks and family offices "see interest in direct crypto investments or crypto ETFs in both Singapore and in Hong Kong.

There is also a demand from distributors, whereby Cerulli's survey shows that they want to develop asset managers "niche product ideas that offer long -term opportunities, including technology issues such as blockchain and crypto".

ETFs are considered another way to give even more small investors access to crypto. Australia has developed into a regional market leader in the crypto ETF area.

Australia's first three cryptocurrency ETFs were traded in May. The Cosmos Purpose Bitcoin Access, 21Shares Bitcoin ETP and 21Shares Ethereum ETP ETFs went to Australia's alternative stock exchange, formerly known as Chi-X Australia, Live.

In June, the Hong Kong branch of the South Korean Samsung Asset Management introduced the so-called first global blockchain-related ETF in Asia. The Samsung Blockchain Technologies ETF is actively managed and can invest in blockchain-related ETFs, such as: B. in the USA noted cryptocurrency futures.

*Ignites Asia is a intelligence service published by FT Specialist for experts who work in the asset management industry. It covers everything, from the introduction of new products to regulations and industry trends. Test versions and subscriptions are available at Ignitesasia.com .