According to a report from Bloomberg, Arrano Capital, launched the nation’s first digital asset hedge fund, with a target size of $100 million for its first year, while officially allocating a window for Bitcoin’s accredited investors. Arrano is the blockchain investment division of Asset Management firm Venture Smart Asia Ltd.
Arrano Capital announced on Monday, 20 April, the release of its Bitcoin index fund. The announcement comes after receiving the green light from the Securities and Futures Commission earlier this month. The report stated,
“The SFC has previously granted licenses to crypto asset managers like Hong Kong’s Diginex, but those haven’t met the full criteria to run pure crypto funds that can be marketed to professional investors only.”
As mentioned above, the investment division was looking to meet a target of $100 million within its first year, and Avaneesh Acquilla, Chief Investment Officer of Arrano Capital stated they could potentially launch a 2nd product very soon. According to the CIO, the long-term target was to actively manage a fund accommodating a range of digital assets. He said,
“We decided to launch this fund to address market demand from professional investors who are increasingly focused on Bitcoin as an alternative store of value. Ultimately for Bitcoin to be widely accepted and for people to trust it, there needs to be regulation.”
An index fund is a type of fund that was initially coined and introduced by Jack Bogle. They proposed the idea of a portfolio to develop and match or track the components of a financial market index such as the S&P 500. Its operation and functionality vary from a traditional exchange-traded fund (ETF), that provides a stake in assets such as stocks or commodities.
Significance of Crypto index Fund in Hong Kong
The above announcement is an interesting piece of development because Hong Kong has not always been the most crypto-friendly nation. According to blockchain laws and regulations, It is only since 2018 that the SFC announced that it would gradually begin to formulate and regulate crypto exchanges in October 2018.
Although Hong Kong does not prohibit the possession or trading of Non-SF Virtual Assets, as Bitcoins and other crypto assets are considered virtual commodities and not electronic money, provided that cryptocurrencies are owned and traded in compliance with legal guidelines.
However, with the launch of its official crypto fund, it would certainly create an inflow of institutional capital into Bitcoin. Given that approval has gone through a period of major financial turbulence, it only highlights the pace at which bitcoin is growing in a particular Asian economic region.