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Institutional demand for high-yield Bitcoin funds is growing following the successful launch of BTC ETFs.
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Blockchain development firm Blockstream has launched two institutional investment funds that provide direct exposure to the company’s Bitcoin ecosystem, giving investors the ability to earn yields on Bitcoin-backed loans and other revenue streams.
In a Jan. 23 announcement, Blockstream debuted its new asset management business, unveiling the Blockstream Income Fund and the Blockstream Alpha Fund, which are set to launch in the first quarter of this year.
The Blockchain Income Fund is designed to pay US dollar-denominated yield by lending against Bitcoin (BTC) collateral from across Blockstream’s network of Bitcoin-native startups and businesses with digital asset treasuries. The fund is focused on loans between $100,000 and $5 million.
The Alpha Fund focuses on portfolio growth, providing investors with exposure to “infrastructure-based revenue streams like Lightning Network node operations.” It’s considered an actively managed fund, which typically carries higher fees.
Blockstream joins companies like Grayscale, Pantera and Galaxy Digital in offering crypto-focused investment funds with various levels of exposure to the industry. As Cointelegraph recently reported, digital asset exchange Crypto.com has also launched an institutional investment platform.
However, the biggest driver of institutional investment has come from exchange-traded funds (ETFs). Net assets held by the US Bitcoin ETFs approached $120 billion as of Jan. 10, according to crypto analytics company Dune.
Net inflows into Bitcoin exchange-traded funds surged ahead of President Donald Trump’s inauguration. Source: Dune
Related: Bitcoin investment ‘material impact’ captures pension funds’ attention
The Trump factor
Analysts believe the recent election of US President Donald Trump marks a pivotal turning point for the crypto industry. If positive regulations are put in place, institutional adoption of Bitcoin and other digital assets is expected to grow.
VanEck’s associate product manager, Denis Zinoviev, said key government appointments, such as Paul Atkins’ nomination to lead the US Securities and Exchange Commission, “could benefit Bitcoin by increasing clarity for institutional investors.”
However, Zinoviev also cautioned that “greater adoption and legitimatization may come [with] heightened scrutiny,” especially around potential tax reforms and crypto reporting requirements.
In the meantime, the SEC has established a crypto task force headed by industry advocate Hester Peirce aimed at developing a clearer regulatory framework for digital assets.
“The Task Force’s focus will be to help the Commission draw clear regulatory lines, provide realistic paths to registration, craft sensible disclosure frameworks, and deploy enforcement resources judiciously,” the SEC said in a statement.
Related: BoA CEO says banks eager to enter crypto if regulators allow
This article first appeared at Cointelegraph.com News
