The Fintonia Bitcoin Physical Fund an and the Fintonia Secured Yield Fund are “institutional-grade” product that targets professional investors who are looking for long-only, passive exposure to bitcoin, according to a statement by Fintonia.
The physical fund aims to provide investors with “quick, safe, and cost-efficient” access to bitcoins while removing the challenge of buying from one of the thousands of exchanges and keeping the bitcoin secure, it said.
“The fund acquires ‘physical’ bitcoin, meaning we will buy the actual bitcoin [rather than] a derivative instrument on bitcoin,” Adrian Chng, founder and chairman of Fintonia Group told FSA.
Cryptocurrency is now a $3trn asset class, and there is increasing interest from institutional investors, according to Chng.
However, he found that investors are often concerned about the security when investing in bitcoin and are confused due to the large number of exchanges.
“As an MAS regulated fund manager with strict standards, we can connect with multiple exchanges and different market-makers, enabling us to find the best prices, as well as buy or sell at volume,” Chng said.
“The fund also enables efficient cash or crypto transfers, resolving the challenges around moving large amounts of cash in or out of the system.”
To address investors’ security and hacking concerns, the bitcoin assets in the fund will be secured with a licenced and insured custodian with expertise in crypto/digital assets security and technology.
The fund also hopes to overcome the difficulty of bequeathing by establishing a legal structure to enable the passing of shares to other parties, including an estate.
Bitcoin loans
The fund manager is also launching the Fintonia Secured Yield Fund, which makes direct loans to holders of bitcoins.
“Bitcoin is an excellent form of collateral for loans. It trades 24/7 and is highly liquid, with approximately $30bn to $60bn per day. If required, it can be quickly liquidated in comparison with, for example, commodities and real assets.”
Typical borrowers are traders, bitcoin miners, and companies which hold bitcoin and would like cash without needing to sell their crypto assets, Chng added.
Fintonia expects both funds to be in the “triple-digit millions” within the first year.
In the long term, Chng believes a clear and strong regulatory framework in Singapore will likely lead to even more positive developments for the cryptocurrency ecosystem in the country, while funds and investment products will also open the doors for more professional investors to invest in bitcoin safely and effectively.
