Can Institutional Investors Purchase Bitcoin in Germany? And how?

Blockchain technology and the interest in Bitcoin is picking up momentum. A few companies such as MicroStrategy decided to exchange their liquid funds denominated in US dollars to Bitcoin. The European Union has set out its proposal to regulate crypto assets as of 2022 for the entire European Union and its 450 million citizens. Furthermore, companies like PayPal want to enhance their service offerings to crypto currencies. Initially starting in the United States, eligible users can now buy and sell Bitcoin via PayPal. Soon, Germany’s supervisory authority BaFin is expected to grant first licenses to crypto custodians, thus legitimating Bitcoin and other crypto assets for institutional investors. In this article, we highlight the leading players in the German-speaking market that meet the regulatory standards and technical requirements to “crypto-enable” financial institutions. With this article we therefore seek to answer the question how institutional investors in Germany can purchase Bitcoin. — Authors: Philipp Sandner, Benjamin Schaub

Blockchain is on the rise in the following fields: crypto assets, digital euro and digital securities. Regarding the development of the necessary regulatory framework for digital assets, two aspects stand out. First, in December 2019, crypto asset custody was incorporated as a financial service in the German Banking Act (KWG) and therefore requires authorization by BaFin from January 1, 2020. Second, the German legislator published a draft bill in August 2020, which intends to abolish the mandatory paper-based certificate for securities. This development can be regarded as revolutionary — as we have discussed here — as it means to break with a system that is over a hundred years old.

However, besides the regulatory development, actors who actively offer products and services are the foundation to drive the adoption of blockchain technology. For this reason, we provide an overview of the companies that enable institutional investors in Germany to access crypto assets such as Bitcoin and Ethereum. The analysis shows that the current market is already more fragmented than one could think.

Please note that this article makes no claim to completeness but is instead intended to give an overview of leading players in the German-speaking market that meet the regulatory standards and technical requirements to “crypto-enable” financial institutions. Please also note that the companies mentioned in this article are already offering their services or plausibly plan to do so by the end of 2020. We refrained from listing companies that plan to offer crypto assets at a later stage.

The “classic” way of investing in Bitcoin

Furthermore, several providers offer exposure to digital assets via so-called exchange-traded products (ETPs). These products are designed to track the performance of one or a basket of several crypto currencies. Among them is ETC Group and the Swiss company 21Shares, whose Bitcoin ETPs are listed on Xetra and Börse Stuttgart. Another way to invest in digital assets is the crypto asset index fund by Iconic Funds, which contains the top 20 crypto assets by market capitalization. Of course, there exist further crypto funds besides the mentioned products.

Figure 1: Key players in Germany that enable Bitcoin investing for retail and professional investors (selected companies)

Bitcoin and other crypto assets for institutional investors

Another bank actively working on innovative, blockchain-based solutions for the capital market is Bankhaus Scheich. In August 2020, Bankhaus Scheich announced offering trading of Bitcoin and other crypto assets to professional investors. The service offering seeks to enable in-custody trading, without exposing clients to transaction and counterparty risks of multiple trading venues.

A look at crypto-friendly Switzerland also reveals a well-developed infrastructure for digital assets. Of course, institutional investors from Germany can also become clients there. SEBA Bank and Sygnum Bank are the first two crypto banks in Switzerland, which have been officially approved by the national supervisory authority FINMA. Furthermore, Crypto Finance and Bitcoin Suisse act as financial intermediaries that enable institutional clients with various services around crypto assets. Also, there are companies like 21Shares, for instance, which offer several ETPs via the Swiss Exchange (SIX).

Crypto assets for the retail market

Also, Bison, backed by Börse Stuttgart, provides an application that aims at retail clients and offers the trading of Bitcoin, Ethereum, Litecoin, and Ripple. As for its institutional counterpart BSDEX, the solution includes the partners Solarisbank and blocknox.

Another player targeting retail clients is Bitwala. In this offering, customers are required to set up a SEPA bank account with Solarisbank in order to trade Bitcoin and Ethereum. Also part of this cooperation is BitGo, which is responsible for the management of private keys. Bitwala also offers debit cards to its customers, which can be used by converting crypto assets into Euro.

Crypto-enabling infrastructure providers

Already embedded as a BaaS platform in the German ecosystem for crypto assets is Berlin-based Solarisbank. Its white-label platform for digital banking services is implemented by companies like BSDEX, BISON, and Bitwala. Furthermore, Solarisbank founded the subsidiary Solaris Digital Assets GmbH in December 2019 to also provide the technical and regulatory infrastructure for crypto asset custody.

Another infrastructure provider offering regulatory and technically compliant white-label solutions is the Bankhaus von der Heydt. With its experience in the structuring of financing solutions, Bankhaus von der Heydt now offers a digital platform for the issuance of security tokens, crypto custody, and fiat-on-ramp. The latter enables its B2B and B2B2C clients to trade crypto assets vs. the Euro.

Fidor Bank, which also provides BaaS, however, offers access to crypto assets for retail and B2B clients alike. Its solution for financial institutions enables trading of Bitcoin against the Euro with SEPA transactions. Also, Fidor Bank offers corporate bank accounts for crypto exchanges, as well as for investors and companies conducting ICOs.

TEN31 Bank, a venture of the fully regulated German WEG Bank, works on a bridge for payment processing between digital currencies and the Euro. TEN31 partners with Nimiq enabling its clients to trade crypto assets against the Euro by using SEPA bank accounts. This service, though, is still subject to regulatory approval.

End of 2020, the bank Hauck & Aufhäuser will also launch its service of a custodian for crypto assets and digital assets. For this, Hauck & Aufhäuser founded HAIC, which is an abbreviation for Hauck & Aufhäuser Innovative Capital. HAIC seeks to offer backoffice and custody services for funds that deal with crypto assets and digital assets.

While Blocksize Capital is not a bank, this software provider also plays an important role for providing trading software to regulated institutes. This software can be used to trade crypto assets on many exchanges with one single interface. It therefore provides one unified interface for market data and trading — with access to many scattered trading venues. The software is operating with multiple financial organizations already.

The custody of crypto assets — next-generation technology on the horizon

Established banks such as Solarisbank and Bankhaus von der Heydt, however, already utilize the next technological generation for crypto custody called multi-party computation (MPC). While these companies provide their service to the end customer, they rely on technology suppliers that deliver their custody technology: Also, CommerzVentures, the corporate venture arm of Commerzbank, invested in the Series A funding round of the custody startup Curv, which is specialized in MPC. Simply put, MPC is a cryptographic mechanism that requires multiple instances to sign a transaction. Therefore, such a solution eliminates the single point of attack for hackers. The trend towards MPC is also noticeable in other countries. For instance, the Switzerland-based company Metaco announced a strategic partnership with Unbound Tech in October to expand the product range of HSM-based custody to MPC also.

Regardless of the technological stack, however, one problem currently appears to be common to all players. Insurances that protect investors against any form of loss of crypto assets are still very expensive. This can be seen as the missing piece of the puzzle for comprehensive investor protection. Insurance premiums for assets under custody are currently around 1% for cold storage solutions and between 2–3% for MPC-based solutions. In the next few years, however, insurance providers will probably acquire more technological know-how for risk assessment so that lower insurance premiums can be expected.


In sum, this leads to an increased and more differentiated offering around crypto assets. Financial services in the crypto segment have, for some time, included instruments which, for example, reflect the price of Bitcoin or market places for retail investors. Now, however, fully regulated trading venues for professional investors like BSDEX and Bankhaus Scheich are emerging. Also, some banks are establishing themselves as a BaaS platform. Solarisbank and Bankhaus von der Heydt, for instance, provide other financial institutions with the regulatory and technological infrastructure to enable access to crypto assets for their customers. It will be exciting to see how the market develops, given the fact that BaFin will issue the first licenses for crypto custody later this year.

The most important aspect is that these companies provide “on-ramps” for professional investors who might want to invest in Bitcoin and other crypto assets. With a solid regulatory foundation and more players providing such “on-ramps”, we can expect 2021 to become an interesting year for this young industry. And for Bitcoin.


This article also builds on a Cointelegraph study on institutional demand for digital assets in the German-speaking countries written by Philipp Sandner, Alfred Taudes, and Demelza Hays and supported by the SIX Digital Exchange, Blocksize Capital, BlockFi, Bitmain, Nexo, Coinfinity, Cache Gold, Seba Bank, Bitpanda, CCFE, Riddle & Code, Iconic, and the Börse Stuttgart Digital Exchange. The 60+ page report is available for free in German and English in September.

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Benjamin Schaub is a project manager and research assistant at the Frankfurt School Blockchain Center (FSBC). His interests include blockchain regulation and governance as well as blockchain use case development. You can contact him via mail ( or on LinkedIn (

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