HK-based IDEG Investment launches two digital asset trusts

By Staff Writer

IDEG Investment, an HK-based digital asset management company, announced on Nov 27 in Hong Kong the launch of two digital asset trusts worth $200mn that will allow traditional funds to invest in digital assets, according to a statement.

Asia Bitcoin Trust I is an actively managed vehicle which offers accredited and institutional investors compliant, secure, and professionally wrapped bitcoin exposure supported by selected service providers. Atlas Mining Trust I is a first-of-it’s kind vehicle allowing traditional investors to participate and share profits from Bitcoin mining activities.

Raymond Yuan, founder of IDEG said: “It’s time for the institutional investors to include digital assets in their asset allocation strategies.” He said thatthe firm’s goal is to be bridge traditional investors and digital assets with “the highest degrees of transparency and security in the industry.”

Unlike passively managed funds and trusts like Grayscale Bitcoin Trust, Asia Bitcoin Trust I is an enhanced Bitcoin trust, which seeks to improve returns by using active management.

Kevin Yang, chief executive of IDEG said that IDEG will apply “a range of hedging and arbitrage strategies in order to gain more Bitcoin for the investors and meanwhile effectively control the risk of drawdowns.”

More than 18mn Bitcoin have been mined and only 21mn Bitcoin will ever exist. Mining of Bitcoin alone offers market participants $4bn to $8bn in annualized revenues.

Yuan said that the mining business is quickly evolving, attracting more institutions into the industry while individual miners are dropping out. He said that institutional miners have a much higher return ratio than mom-and-pop miners.

Coinbase Custody, the world’s largest digital asset custodian holding over 900,000 Bitcoins, will act as the custodian for both trusts.

Profound Trust, a trust company with more than 1000 clients in Asia, will act as trustee. The company’s chief executive Lu Qi was quoted as saying that more and more institutions and sophisticated investors seek exposure to the blockchain and digital asset market. They are demanding better compliance, security, and professionalism.

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