Fitch Ratings: Funds investing in cryptocurrency will face liquidity problems

A law was recently passed in Germany that gives local investment funds the right to invest part of their capital in digital assets.
As a reminder, under this document, up to 20% of their portfolio can be invested in cryptocurrency-oriented products. However, analysts at Fitch Ratings believe that if the funds go into the digital market, they will face liquidity problems.

Fitch Ratings: Funds investing in cryptocurrency will face liquidity problems

Currently, German so-called special funds have assets totaling up to $1.17 trillion under their management. Such financial giants, which accumulate insurance and pension capitals, were allowed to direct part of their funds to buy cryptocurrencies.
However, it is worth remembering that bitcoin and similar instruments are volatile assets. At any moment, the market will begin to fluctuate, and the value of BTC may collapse. In this situation, the funds will suffer losses. The rating agency doubts that German institutionalists will direct up to 20% of their capital to the cryptosphere.
Such players traditionally follow a cautious policy. Therefore, even if they do go for investments in digital assets, the share of directed capital will be much lower than 20% of the portfolio, as the law allows.
FX24

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