Despite the challenging regulatory landscape for cryptocurrencies in the United States, European crypto asset manager CoinShares has announced plans to establish a hedge fund unit in the country.
CoinShares officially unveiled this development on September 22, marking its foray into the US market. The new division, named CoinShares Hedge Fund Solutions, aims to cater to the growing demand for cryptocurrency-based products, particularly Bitcoin (BTC), among accredited US investors .
According to Lewis Fellas, the head of hedge fund solutions at CoinShares, cryptocurrencies' path to widespread adoption has been marked by fluctuating promises and short-lived successes. He emphasized that the demands of institutional cryptocurrency investors continue to evolve as the risk landscape in the crypto market changes.
CoinShares plans to kick off operations for its hedge fund unit in August 2023. It has been developing the platform and strategy since January. The new unit will offer various cryptocurrency investment products designed to bridge traditional investors with the digital asset industry. While specific crypto products were not detailed in the announcement, CoinShares mentioned a wide array of products that will soon be available in the US.
The company's objective is to cater to the unique requirements of each institution by providing a diverse range of products covering different beta and alpha strategies, as well as hybrid offerings. CoinShares Capital, a wholly owned subsidiary of CoinShares registered with FINRA as a broker-dealer , will be responsible for marketing the products to qualified US investors. Additionally, CoinShares (Jersey) Limited is registered with the US Securities and Exchange Commission as an exempt reporting adviser.
CoinShares, headquartered in Jersey, is among the largest cryptocurrency investment firms globally, offering a variety of cryptocurrency exchange-traded products. Notably, it launched the first Bitcoin exchange-traded product (ETP) in 2015 and followed up with an Ethereum ETP in 2017 . The company is known for its extensive research efforts, regularly publishing crypto fund flow reports and analyzing digital asset markets.
CoinShares' decision to enter the US market comes at a time of regulatory uncertainty in the country. Leading crypto exchanges Coinbase and Binance.US are currently facing SEC lawsuits over alleged unregistered securities offerings. In response, Coinbase has been actively expanding its presence in non-US markets like the European Union and the United Kingdom while exploring acquisitions to bolster its overseas derivatives business.
