Deutsche Bank’s Asset Management Arm Explores Option to Invest in German Crypto Companies

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by Bhushan Akolkar · 2 min read
Deutsche Bank’s Asset Management Arm Explores Option to Invest in German Crypto Companies
Photo: Tony Webster / Flickr

Sources familiar with the matter said that Deutsche Bank is looking to invest in German crypto firms along with a potential collaboration with Mike Novogratz’s Galaxy Digital.

As per the Bloomberg report on Wednesday, February 8, Deutsche Bank AG‘s asset management wing is looking to invest in two Germany-based crypto firms as part of its growth strategy, reported Bloomberg citing people familiar with the matter.

Stefan Hoops, the Chief Executive Officer at DWS Group recently held talks of securing a minority stake in Deutsche Digital Assets, which provides crypto exchange-traded products. The sources said that another target is the market-making firm Tradis owned by Bankhaus Scheich.

Additionally, the sources stated that Deutsche Bank also held potential talks of collaborating with Galaxy Digital, the firm run by crypto billionaire Mike Novogratz.

With this recent development, Hoops seem to be trying to restore the reputation of the DWS Group which recently faced allegations of greenwashing and later a probe by the US and German authorities. However, these bold measures come at a time when the entire crypto sector has been marred by multiple governance scandals. For a long, Hoops has been advocating new technologies. Recently in December 2022, Hoops also outlined a strategy for using blockchain and digital currencies.

Traditional Finance and Crypto

The DWS Group is not the only firm having roots in traditional finance and looking to expand into the buzzing crypto space. Some of the biggest financial giants like Blackrock Inc and Bank of New York Mellon have been betting on crypto with hopes that this space offers lucrative opportunities as the industry matures.

In late 2021, Tradias, which also has German brokerage firm Trade Republic among its clients was in touch with Frankfurt prosecutors for selling confiscated digital assets in a way that would create minimum volatility. The source familiar with the matter stated that Deutsche Bank is looking to buy a minority stake in Tradias.

One of the biggest challenges for the DWS Group will be reviving growth and investor confidence. After a brutal market crash last year, the group had reported €20 billion ($21.5 billion) in net outflows and a €107 billion drop in managed assets.

During an earnings call last week, Hoops stated that DWS has “started to assess strategic partners and commence due diligence on potential targets” in areas where it wants to develop new capabilities, such as digital assets. He said the recent drop in digital asset prices could yield “interesting opportunities”.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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