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Germany to Allow Institutions to Invest Up To 20% in Crypto

The new legislation in Germany marks a watershed point in the general use of crypto assets. Furthermore, the passage of the bill corresponds with major investments in the financial sector. Among them are Mike Novogratz, CEO of cryptocurrency-focused Galaxy Investment Partners, and famous hedge fund manager Alan Howard.

 

This new regulation has been passed that allows over 4,000 institutional investment firms to invest billions of euros in digital assets. A new law that takes effect on Monday will allow so-called Spezialfonds (special funds) with pre-determined investment rules to invest in digital assets. Companies would be allowed to invest up to 20% of their capital in cryptocurrency assets.

Frank Schäffler, a legislator, feels that the new legislation will increase the adoption of the new assets. Other nations, on the other hand, are concerned about cryptocurrency infiltrating their economy.

 

Spezialfonds, for example, are solely open to institutional investors such as insurance and pension funds. They manage around €1.8 trillion ($2.1 trillion) in assets, none of which are in cryptocurrency. As a result, if they invest up to their legal limit, the cryptocurrency market might see up to $422 billion in investment.

 

As cryptocurrency becomes more well-known, more of these investors are interested in participating. The measure was passed by Germany’s Bundestag and will be proclaimed by the country’s Federal Council as soon as feasible.

In the previous year, institutional investors have increased their use of cryptocurrencies considerably. The value of crypto assets has risen steadily, with a small group of affluent individuals controlling the vast majority of assets.

 

The majority of German bitcoin experts agree that this move is a step in the right direction for the country. To be sure, the transition will elevate Europe’s economic powerhouse to the top of the list of financial investment destinations.