Increased Demand Pushes a Hong Kong-based VC to Launch a Bitcoin Fund

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Hong Kong-based VC CMCC Global has announced the launch of a crypto fund, which could spur crypto investments from institutions. In an interview with industry news medium CoinDesk, Martin Baumann, the managing partner at the company, spoke on the new Liberty Bitcoin Fund and what the company hopes to do with the new crypto solution. The fund is essentially a single-asset passive Bitcoin tracker, providing institutions with the ability to purchase and store their assets, while also keeping tabs of the asset’s price movements over time.  

Baumann revealed that the fund was created out of a desire to meet immediate demand. The CMCC Group already has three funds being managed, all of which were created no earlier than 2016. However, while the funds have so far gotten a lot of patronage from institutions and high net worth individuals, all of them were focused on investments in proprietary technical infrastructure, which could, in turn, be used by developers to build applications.

According to Baumann, the rise in prices of cryptocurrencies spurred the company’s investors to take a particular interest in the budding asset class. The managing partner claimed that investors have continued to ask whether they can purchase Bitcoin through the group. This demand, in his point of view, is what spurred the creation of the Liberty Bitcoin Fund.

The Liberty Bitcoin Fund makes use of ANXONE Custody, a digital asset storage system whose insured wallets are provided by the BC Group, a digital asset custodian that is also publicly listed on the Hong Kong Stock Exchange. 

The decision underscores an increased appeal for cryptocurrencies amongst companies in the traditional finance industry. While the rise in cryptocurrency values can be seen as a direct contributor to this, there is also the fact that cryptocurrencies are beginning to become a regular fixture in the financial products market. Derivatives, ETFs, and other investment products provide even more of an opportunity for investors to diversify their portfolios, and even the investors themselves know that. 

In addition to this, a surge in the cryptocurrency custody sector has also helped fuel the increase in cryptocurrency interest among institutional investors. Custody services essentially provide an opportunity for institutions to store assets without particularly bearing any risks, and if there is anything that investors love, it is the prospect of making money in a risk-free environment.

Coinbase Custody, a custodial service operated by cryptocurrency exchange Coinbase, announced back in June that it already had $1.3 billion in assets under management. For a service that was only launched in July 2018, this isn’t any small feat. 

And it is expected to get even better. An Israeli firm known as GK8 announced earlier this week that it had secured $4 million in seed funding, and it would be gearing up to launch a custody service, which would essentially allow users to make transactions on a blockchain without the need for an Internet connection. 

In a press release, GK8 revealed that the new service employs cryptography techniques, thus operating like a cold wallet with hot wallet capabilities as well. By taking transactions off the net, GK8’s wallet could significantly improve asset security, and, in the long-run, possibly attract even more institutions.

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About Jimmy Aki

Jimmy has been following the development of blockchain for several years, and he is optimistic about its potential to democratize the financial system.