Union Investment claims that it has completed its pilot tests with Bitcoin certificates and is now planning to mix small amounts of the cryptocurrency into funds.
Like the business magazine Bloomberg reports, Union Investment, one of the largest local asset managers based in Frankfurt am Main, plans to include Bitcoin in funds. Accordingly, the experimentation phase with Bitcoin certificates has been concluded.
“We are considering adding bitcoins in small amounts of no more than 1 percent to 2 percent to a handful of other funds for private investors,” Daniel Bathe, portfolio manager at the fund company, told Bloomberg. As a fund service provider for the cooperative banks in Germany (Volksbanken Raiffeisenbanken) Union Investment manages almost 430 billion euros (as of end of June). So far, he has not wanted to reveal any more details about the date, but the fourth quarter of the current year is possible.
Union Investment: just the beginning?
With the plans, the traditional financial world is taking another step towards digital assets and allowing a broader mass to jump on the crypto bandwagon, as Bloomberg writes. The advance of the asset manager is another example that investing in Bitcoin and Co. is becoming easier and easier in the local area as well. The DZ Bank analyst Sören Hettler: “A simplified entry into the market segment for institutional and private investors is a development that has been emerging for some time and is considered to be an important factor influencing the Bitcoin price gains between autumn 2020 and the beginning of this year ”.
At the same time, however, Hettler also warns of the enormous risks of the crypto market. “As an addition to a portfolio”, however, crypto stocks like BTC could “make sense”, he admits. Union Investments Daniel Bathe also sees it this way: “Bitcoin is well suited for the diversification of portfolios because, in the long term, it often shows no correlation with traditional asset classes such as stocks or bonds,” says the portfolio manager.
It remains to be seen whether the fund companies of Sparkasse (Deka) and Deutsche Bank (DWS) will follow suit.
For Dr. Sven Hildebrandt, the managing director of DLC Distributed Ledger Consulting GmbH, was not surprised by the move, as he told BTC-ECHO: “The move by Union Investment was to be expected – which does not mean that it should be underestimated. Every asset manager who wants to achieve the best for their customers – and that is the job of an asset manager – will be invested in crypto values in the future. It is exciting that the Union is apparently taking the first steps more publicly in the retail business, which also shows a statement about the degree of innovation of institutional capital investments. “
“So there is still a lot to be done,” said Hildebrandt.