When the new Fund Location Act (Fondsstandortgesetz) comes into effect on 1 July 2021, domestic special funds (Spezialfonds) in Germany will be permitted to invest up to 20 % of their portfolios into crypto assets like Bitcoin. The addition of crypto assets in special funds is an important next step towards legitimising crypto assets as an asset class. This new law will undoubtedly boost Germany's position as a financial investment hub. The market has already seen billions enter the crypto space form institutional investors over the last year. Market experts already expect that the new regulation will unleash significant investments into the crypto markets. Sven Hildebrandt, CEO of Germany-based Distributed Ledger Consulting (DLC), sees a theoretical inflow potential for crypto assets in the order of EUR 350bln. That would be around one-fifth of the assets of around EUR 1.87 trillion currently tied up in approximately 4,000 open-end domestic special funds. The question remains: who is next?

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