Huobi Asset Management launched today four new virtual asset-related funds, creating new ways for accredited and institutional investors to gain exposure to Bitcoin and Ether as well as the crypto mining sector.

Huobi’s new funds include a BTC tracker fund, an ETH tracker fund and a multi-strategy virtual asset fund, all of which are solely invested in virtual assets. The funds are only available to accredited investors — which include high net worth individuals, mutual funds, corporate treasuries, family offices and other traditional asset managers — as defined by the Securities and Futures Ordinance and the Securities and Futures (Professional Investors) Rules.

The BTC and ETH tracker funds are passive funds designed to mirror the performance of the corresponding cryptocurrencies, which allows investors to invest in the top two digital assets without ever having to directly deal with cryptocurrency. The multi-strategy fund is an actively managed fund that is invested in a basket of diversified virtual assets and offers investors the potential for greater returns compared to passive allocation. The fourth offering is a private equity fund in the global crypto mining businesses.

Both the ETH tracking fund and the multi-strategy fund are the first in this category of virtual asset investment products to be issued by a licensed fund manager in Hong Kong.

“Asian institutional investors are very interested in crypto assets, but while some of them are comfortable buying crypto themselves, others would prefer to buy some regulated funds, such as our Huobi assets,” Said Lily Zhang, CFO of Huobi Tech, in an interview with Forkast.News.

All the funds are being launched as institutional interest in digital assets and prices of cryptocurrencies like BTC and ETH are reaching record highs. Earlier this month on April 14, Bitcoin hit an all-time high of US$64,787.65, while Ether hit a new high of US$2,547.56 less than a week ago — with both cryptos expected to continue rising throughout 2021.

Changing face of SFC

Last month, Huobi Asset Management obtained the Securities and Futures Commission’s (SFC) approval to manage and distribute funds 100% invested in virtual assets. In September 2019, the SFC, Hong Kong’s financial watchdog, established a clear regulatory framework for crypto assets and started approving virtual asset licenses to cryptocurrency trading platforms, custodians and crypto fund managers.

“When I came to the Hong Kong market three years ago, the regulators were not so familiar with cryptocurrency related products,” said Zhang, who used to work for a crypto mining manufacturer prior to Huobi. “But when we came this time looking for approval on this Huobi asset license, I found they have made very fast progress and their knowledge on the space has grown very quickly.”

Zhang added that while she found the SFC quite apprehensive toward crypto in her initial interactions with them three years ago, she finds the regulators to be “very friendly” now.

“They are beginning to know more about the industry,” Zhang said. “We were able to cooperate together to work and get the license approved.” 

The Hong Kong SFC was very communicative in expressing any concerns, transparent about the requirements for Huobi to obtain the needed approval, and happy to collaborate throughout the process, Zhang added. 

Since obtaining approval, Huobi Asset Management has already received US$50 million in commitments across the four funds and is targeting US$100 million by Q3 2021.

“I am glad to see Huobi Asset Management’s funds launch in a quick and efficient manner,” Zhang said. “We aim to be the leader in providing comprehensive virtual asset related services in Asia and will continue making our best effort to drive regulatory compliance within the virtual asset industry.”