On Wednesday, August 4, French asset manager Melanion Capital announced on its website the launch of the European Union (EU)-regulated Bitcoin tracker that monitors the price of Bitcoin. Melanion Capital is a privately-held investment management firm based in France, regulated by the Autorités des Marchés Financiers.
Due to meeting the EU’s key standards, the Paris-based fund manager is the first firm to receive approval from the French regulator regarding the launching of an exchange-traded fund (ETF).
‘While there have been many bitcoin-backed exchange-traded products listed in Europe, most European regulators apply a look-through approach, rendering them ineligible for most institutional investors due to their investment restrictions,’ Melanion Capital stated according to CoinDesk.
The fund will follow up to 30 stocks that have a 90% relation to the price of Bitcoin. The sectors involved in the stocks include cryptocurrency-related sectors such as crypto mining and blockchain technology.
However, the fund won’t be a Bitcoin ETF since they don’t plan on investing in or directly holding Bitcoin tokens. Rather than Bitcoin, the Melanion BTC Equities Universe Ucits ETF will be based on stocks and will track such stocks including mining firms Argo Blockchain, Riot Blockchain and Hive Blockchain.
‘I haven’t seen any funds launched yet that are focused on digital assets under the Ucits umbrella,’ stated Winston Penhall, a London-based funds lawyer at Keystone Law. The Undertakings for the Collective Investment in Transferable Securities or simply known as Ucits is what the EU standards are also called.
‘Most pipes of the traditional financial system stop at access to bitcoin,’ said Melanion Capital CEO Jad Comair. Adding, ‘The ETF was a real challenge because of the sensibilities and politics currently surrounding bitcoin and bitcoin investing.’
Investors in the EU are typically hesitant when it comes to non-Ucits funds. The approval of the ETF shows how fund companies are now more inventive to explore the adoption of digital assets.
Moreover, Bita, a German fintech that supplies software for the computation of financial indexes and quantitative investment methods, will determine the fund’s weighting. Once Melanion’s ETF is listed on Euronext in Paris, it will reportedly collect a 0.75% fee. The exact date of the listing is yet to be revealed.
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