Cryptocurrencies can be a satellite asset rather than a primary asset in an investor's portfolio, Asakura explained.
Japanese financial services giant SBI Holdings has announced that it will launch the country's first cryptocurrency investment fund in an attempt to allow retail investors to diversify their portfolios and invest in digital assets. This move is the latest positive development for the Japanese cryptocurrency industry, which has taken crucial steps towards mass adoption in recent months.
Expected to be available at the end of November, the cryptocurrency fund could facilitate investments of millions of dollars in a wide variety of crypto assets such as Bitcoin, Ethereum, XRP, Bitcoin Cash, and Litecoin.
SBI is looking to target investors who understand the volatility associated with the cryptocurrency market, explained Tomoya Asakura, president of SBI affiliate Morningstar Japan KK, adding that a minimum investment of around 1 million yen ($ 9,100) will be required. ) to 3 million yen ($ 27,300).
In response to domestic crypto scandals, Tighter regulations meant that SBI had to give up its initial plans to launch the fund through investment trusts and instead use a vehicle popularly known as "joint-stock companies." Thus, it took SBI four years to form its first cryptocurrency fund.
However, Asakura believes that the public's positive response to the first fund will prompt the financial giant to move rapidly towards launching a second.
"I want people to have it alongside other assets and experience first-hand how useful it can be for diversifying portfolios," added Asakura.
Despite mounting regulatory barriers, the cryptocurrency industry in Japan has continued to flourish as of late. The US-based cryptocurrency exchange Coinbase recently launched a local trading platform in Japan, reporting that transactions in the first half of 2021 have doubled from the previous year and are currently valued at 77 trillion yen ($ 700 billion).
Asakura explained that doubts about cryptocurrencies stem from the overwhelming perception that assets are highly volatile and speculative. He believes that crypto funds like the one SBI is launching will show both the public and regulators that investors can build a more resilient portfolio by adding crypto than by investing solely in traditional assets.
The asset manager concluded by saying that SBI will be willing to build a separate fund for institutional investors if there is sufficient demand.