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The crypto-craze among Asian investors is motivating asset managers in the region to seize opportunities to lure them with their products despite tightening regulations, Cerulli Associates notes in a new report.
A number of crypto and blockchain-focused funds investing in the wider world without direct investment in cryptocurrency were launched last year in Singapore, Hong Kong and Korea, while Australia saw the region’s first ETFs with direct exposure to bitcoin and ether.
Singapore-based Ken Yap said: “For investors, the increasing number of mutual funds and ETFs in the market is helping to expand product options or even legalize investing in cryptocurrencies by providing safer ways to access this asset class, compared to direct investing. in Crypto” is Cerulli’s Managing Director for Asia.
“Cryptocurrency funds provide an important asset-raising opportunity for managers,” Yap added.
Regional regulators have been cracking down on the asset class, with the Monetary Authority of Singapore Reducing access to retail To crypto in August and the Securities and Exchange Commission of Thailand Advertising rules fix for digital asset companies.
South Korea also not currently Allow local players To take advantage of cryptocurrency exchange services.
This environment, characterized by increased regulatory scrutiny and market volatility, will be a “key selling point” for asset managers in providing crypto-related funds, rather than products that have direct exposure to the asset class, Yap said.
Growing regulation has not stopped Asian managers from looking for opportunities in this area, with a number of Korean companies taking steps to grow the capabilities of their digital assets.
In January, Mirai Group Korean Financial Assets Announce plans To launch a digital asset business initially targeting custody services for cryptocurrencies and non-fungible tokens, and eventually creating loans and funds tied to digital assets, the Korea Economic Daily reported, citing industry sources. This payment came amid a growing demand for these services.
KB Asset Management, South Korea’s largest bank, announced in February that it had set up a digital asset management preparatory committee to explore the development of digital assets and artificial intelligence funds.
KB AM launched the KB Global Blockchain Digital Economy Fund, the country’s first strategy focused on investments in blockchain technology companies, in September last year.
Ciroli said that Generation Z and Millennials are fueling interest in cryptocurrencies in South Korea.
Singapore is also seeing strong interest among young investors, with Ciroli citing a survey from last year that found 51 percent of those aged 25-44 were more willing to invest in cryptocurrency, while only 36 percent of those aged 45 showed Or more the same interest.
At the beginning of the year, BNY Mellon Investment Management . was I’m getting ready to take off Singapore’s first retail-oriented fund to invest in the blockchain world, amid growing interest in crypto assets and related technology among local investors.
Thailand and Vietnam too Featured as hot sites retail cryptocurrency investments in Southeast Asia, even in the face of a global market defeat and tight regulations imposed on the highly volatile sector.
Thailand recorded $135.9 billion worth of cryptocurrency traded in the 12 months to June 2022, while Vietnam recorded $112.6 billion, according to a report published by blockchain data platform Chainalysis on September 21.
Crypto has also attracted interest from high net worth individuals, with Cerulli reporting that some private banks and family offices in both Singapore and Hong Kong are “seeing interest in direct investment in crypto or crypto ETFs.”
Distributors are also in demand, with Cerulli’s survey indicating that they want asset managers to “develop niche product ideas that offer long-term opportunities, including on technical topics such as blockchain and crypto.”
ETFs are seen as another way to give more retail investors access to cryptocurrencies. Australia has emerged as a regional leader in the crypto ETF space.
Australia’s First Three Crypto ETFs Trading started in May. Cosmos Purpose Bitcoin Access, 21Shares Bitcoin ETP, and 21Shares Ethereum ETP ETFs were launched on the Australian Alternative Exchange, formerly known as Chi-X Australia, that month.
In June, the Hong Kong arm of South Korea’s Samsung Asset Management rolled What has been called the first global ETF related to blockchain technology in Asia. The Samsung Blockchain Technologies ETF is actively managed and can invest in blockchain-related ETFs, such as US-listed crypto futures ETFs.
* Ignites Asia is a news service published by the FT Specialist for professionals in the asset management industry. It covers everything from new product launches to regulations and industry trends. Trials and subscriptions are available at ignitesasia.com.
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