The German Federal Financial Supervisory Authority (BaFin) has granted marketing authorization and registration to Munich-headquartered BITREAL Capital GmbH to operate a cryptocurrency and real estate hybrid fund, called BITREAL Real Estate Blockchain Opportunities Fund 1 (BREBCO 1).
This will be the first hybrid fund of cryptocurrency and real estate in Germany, and it is aiming for an equity volume of 40 million euro ($48.95 million). The fund is designed for a wide range of investors – semi-professional and professional – as the minimum investment volume is set at 500,000 euro ($612,000).
The fund has set up to invest in the booming blockchain technologies through established tokens and coins. Moreover, it will invest in AA core commercial real estate, partly financed by bank loans, in the top 10 economic regions in Germany. This will minimize the investment risks related to crypto funds but will provide a high return potential.
According to the fund managers, BREBCO 1 will have a lifetime of 7 years and will generate 15 percent return annually.
The fund will also provide flexible deposit options. To lure the cryptocurrency holders to invest, it has options of Bitcoin or Ethereum deposits along with direct euro transfers. Moreover, the euro depositors will have the option to withdraw their money in fiat or the listed cryptocurrencies.
The cryptocurrency funds are not in good shape lately. The bleeding market since January has resulted a year-to-date depreciation is 43.1 percent, according to the cryptocurrency funds’ index by BarclayHedge. Moreover, in March alone, the funds shed 29.2 percent.
However, despite the declining performance, the number of funds in the market is increasing. To cope up with this situation, many trading platforms are introducing specialized services to cater institutional clients.
Boris Hardi, Managing Partner of BITREAL Capital GmbH said: “Since summer of last year, questions of family offices and high net worth individuals as to how or in which virtual currencies, coins, and tokens can be sensibly invested in or how to take part in the blockchain technology market potential without the high volatility and risk of total loss were raised. Our answer is the BREBCO 1 fund, which is now officially registered in Germany by the BaFin.”