Investing in the new digital currencies will make it easier for qualified investors.
CryptoFund AG wants to launch a fund this year. The boom of the new digital currencies reached the classical forms of investment of the financial sector. In Switzerland, this year a fund will be launched, which is underlined with Bitcoin, Ethereum and other crypto currencies.
“We are in talks with Finma,” says Jan Brzezek, head of CryptoFund AG, headquartered in Zug, who wants to launch the fund. “In the fourth quarter, we want to go live. It will be Switzerland’s first regulated fund for cryptosis. “At present, negotiations are taking place with the future custodian bank in Switzerland.
The company is advised by the law firm MME, audit firms are expected to be PWC and EY. On the Board of Directors of the CryptoFund, Marc Bernegger, a Fintech specialist and investor, is sitting in numerous start-ups.
Chief Jan Brzezek comes from UBS, where he last worked as a business manager at President Asset Management and President UBS Group EMEA and was also part of the innovation team.
The co-founder is Tobias Reichmuth, head of the Finma-regulated asset manager SUSI Partners. In summer, the Board of Directors is also to be filled with another well-known Swiss banker.
For qualified investors the prices of Bitcoin and Ether have grown massively this year against francs and dollars, partly by more than 1000 percent. The new digital assets are still pioneering and pose a number of risks, including the so-called “blockchain” technology.
But the interest of investors is enormous. Every day, Swiss banks are asked by wealthy customers how they can invest in the new asset class. So far, it is not quite trivial to buy Bitcoins and Ehers in the larger style and above all, to manage them.
This should change with an investment instrument with a common security number. “We want to build bridges between the old and the new world,” says Brzezek. CryptoFund’s fund is, however, only open to qualified investors, such as pension funds, insurance companies, banks, family offices and other eligible investors.
The reason lies in regulation. There are less hurdles when a fund is offered to qualified investors only and not to the general public. “Because of the risks, cryptic investigations should at present only be used for diversification in the Alternative Investments category,” says Brzezek. «The Cryptocurrency Fund» The new fund, called “The Cryptocurrency Fund,” will include the most important cryptosyncations Bitcoin and Ethers, but also include others such as Ripple or Litecoin.
Brzezek, the asset manager, will invest the portfolio on a currency-by-currency basis and work with several trading venues. The responsibility for the net asset calculation and issue and redemption of units has a FINMA-regulated fund management, and the currencies purchased are not held with CryptoFund AG, but with a FINMA-regulated custodian bank in Switzerland.
Specifically, this bank will manage the so-called private keys – a type of passwords – that entitle the transfer of digital assets. Appropriate technical solutions for custodian banks are in the pipeline. Brzezek is aiming for a fund volume of 100 million Swiss francs in the first year, with around 10 million already being invested by investors.
There are limits to the upper limits, since the liquidity of the cryptic payments is still too small to allow large commercial orders without massive movements. However, they are already valued at more than one billion dollars a day. The market capitalization of all cryptic payments is around 100 billion dollars.
In Switzerland, only Vontobel has a certificate, which follows the course of Bitcoin. In the US, Bitcoin Investment Trust is open to certain investors. In addition, there are a few other financial instruments, including those in Germany, which, however, usually only focus on one single currency.
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