National Bank of Bahrain launches region’s first Bitcoin investment fund

The National Bank of Bahrain (NBB) has launched the GCC region’s first Bitcoin-linked structured investment fund for institutional and accredited investors.

This product was developed in partnership with ARP Digital and is designed to provide a secure avenue for investors to capitalize on Bitcoin earnings.

The Bitcoin Mutual Fund

According to local media reports, the structured investment fund has a predefined cap and offers a unique opportunity for accredited investors to benefit from Bitcoin’s rising performance.

This design ensures that while investors can take advantage of Bitcoin’s growth, they also enjoy 100% capital protection against downturns. This serves as a hedge against the volatility typically associated with digital currencies.

Hisham AlKurdi, NBB’s Group Executive Director of Markets and Client Solutions, expressed pride in the launch: “We are proud to introduce this tailor-made structured investment, which combines the attractiveness of digital asset exposure with the security of capital protection”.

The new initiative aligns with NBB’s strategy to enhance its wealth management offerings by providing tailored solutions that balance growth potential with risk mitigation. This move comes amid increased demand for investment products that allow exposure to digital assets while fully protecting investors from market fluctuations.

Abdulla Kanoo, co-founder of ARP Digital, highlighted the importance of their partnership, saying it would be a game changer in the regional market. He explained that by combining their expertise in digital assets with NBB’s broad reach in the financial sector, they have developed a product that provides exposure to Bitcoin within a “highly secure framework”.

Bahrain’s Expanding Crypto Ecosystem

Dalal Buhejji, Executive Director of Business Development for Financial Services at the Bahrain Economic Development Board, commented: “The launch of this Bitcoin-linked structured investment is a great example of the true potential of Bahrain’s robust financial services ecosystem. Bahrain, which provides an attractive and streamlined environment for innovative solutions.”

Bahrain has been steadily attracting more digital asset companies due to its efforts to cultivate an “innovation-friendly” fintech and crypto ecosystem. According to Eric Anziani, COO of Crypto.com, this approach includes implementing clear regulations that strike a balance between consumer protection and commercialization.

In September, Bahrain’s central bank granted the company a license, joining other crypto exchanges such as BitOasis and Binance, which has been operating locally since March 2022.

A recent report by Chainalysis also revealed that the Middle East and North Africa region accounted for 7.5% of the global cryptocurrency transaction volume between July 2023 and June 2024, with a total of 338,700 millions of dollars.

Most of these transactions were driven by institutional and professional investors. While centralized exchanges (CEX) remain the main source of crypto entry in MENA, interest in decentralized platforms and DeFi applications is slowly growing.

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