Neuberger Berman, a multibillion-dollar and well-established asset management firm, has recently been allowed to invest a relatively minute percentage of its overall assets into crypto. This is made possible due to Bitcoin (BTC) ETFs (Exchange Traded Funds) and BTC futures.
It had been via an amended regulatory filing that was made in conjunction with the U.S SEC that Neuberger Berman stated that as of now, its commodities mutual fund (worth $164 million) can reserve a maximum of 5% of its total assets for Bitcoin investments in order to obtain indirect exposure towards the flagship cryptocurrency.
Neuberger Berman looking for crypto exposure
The SEC filed supplement, which had occurred yesterday on the 20th of August 2021, additionally stated that the aforementioned fund is permitted to obtain investment exposure pertaining to crypto via BTC futures that are traded on various futures exchanges. These exchanges have to be registered with the CFTC (Commodity Futures Trading Commission) first. An alternative pathway to obtain the permission could also be via investments in the ETFs’ securities that have been organized as well as officially listed for trading purposes in Canada and are associated with Bitcoin investments.
The development has occurred on the heels of similar ones that were made throughout August. The company had made the initial filing with the SEC less than a couple of weeks ago on the 11th of this month, which was around the time when it had added BTC trusts, crypto derivatives, and also ETFs to the list of all of Neuberger Berman’s permitted potential investments. For derivatives specifically, the filing was primarily concerned with Bitcoin and Ethereum (ETH). The recent supplement has, however, since claimed that Ether derivatives would not appear as part of the company’s investment options any longer.
What caused this recent development?
As per the information provided by various earlier reports, the company has stated that the main driving factor behind the desire for crypto-oriented exposure had to do with wanting the abovementioned fund’s usage to grow and be utilized as a sort of inflation hedge. Furthermore, Neuberger Berman had additionally stated that this could result in a new potential revenue source for the company thanks to the price trends.
In related news, the company is not the only one that is thinking about removing Ethereum from the equation for now, as others like ProShares and VanEck had both previously withdrawn applications that were made with the SEC concerning the approval of ETH futures exchange-traded funds. In fact, the decision to withdraw had apparently taken place only a couple of days following the initial filing.