Bitcoin-focused fund to list on Nasdaq Dubai
First digital asset fund to trade on Middle East bourse
ABitcoin-focused fund will list on Nasdaq Dubai, making it the first digital asset fund to do so in the Middle East. The listing comes as Bitcoin hit a record high of nearly $65,000 on April 14 — before slipping to $54,500 levels over the last few days.
The listing should take place this quarter itself, according to the promoter. The Bitcoin Fund’ comes from 3iQ Digital Asset Management, which received the final clearances from DFSA (Dubai Financial Services Authority) and regulator of Nasdaq Dubai.
The Fund is an extension of the listing done in April last year on the Toronto Stock Exchange — at the time it claimed the title of being the ‘world’s first regulated, major exchange listed Bitcoin fund.
Dubai’s Dalma Capital is the syndicate manager for the closed-ended Fund and lead its profile and exposure among Middle East based investors.
Trend likely to continue
Despite the price slip ups of recent days, a top official at Dalma reckons the Bitcoin as an asset narrative is not one to go away. “The recent price runup is less defined by retail purchasing and more to do with an incrementally increasing institutional allocation to Bitcoin as a store of value,” said Zachary Cefaratti, CEO of Dalma Capital. “This trend is likely to continue in this region as well.”
“Bitcoin has, from the beginning, been a grass roots movement and has been sold and promoted from peer-to-peer. There is no need to hard-sell Bitcoin — that has already been done by visionaries like Elon Musk and by grass roots investors,” Cefaratti said.
He has got that right — Musk and Tesla are playing their part in riding this Bitcoin wave, and more blue-chip US entities are either talking about buying up these coins or have already done so.
What is 31Q?
Since its April listing in Toronto, the Bitcoin Fund has built up a size of $1.37 billion. The Toronto Stock Exchange has been the go to place for Bitcoin and other crypto assets; the exchange has the regulatory framework as well as a conducive environment for these newfangled investments.
According to 3iQ, the listing in Dubai allows new investors an exposure to an “asset class that has experienced exceptional appreciation over the preceding decade”.
“The goal of our Fund is to give the purest exposure to the underlying digital asset,” said Frederick Pye, Chairman and CEO, 3iQ Corp. “If more corporate giants continue to buy the assets, the effect will be a price increase caused by a combination of greater demand with the scarcity of the asset.”
Until now, the Bitcoin movement in the UAE and elsewhere in the Gulf has been led by individual investors. But some family offices — essentially financial vehicles taking care of the wealth of super-rich families — have taken positions in this asset and should be adding more.
“There is a limited supply of 21 million Bitcoins. It does not limit our Fund or investors’ options,” Pye said.
The Fund will buy — and hold — Bitcoin and will not deploy in other crypto asset classes. “The objective is to provide pure Bitcoin exposure,” Pye added.
Choice of Nasdaq Dubai
“In terms of limits, there is no minimum or maximum restriction on the amount one can invest in the fund once shares are trading on the exchange,” Pye said.