EU- Regulatory approved french fund manager Melanion Capital for an ETF that will closely track the price of bitcoin. The fund plans to track a basket of up to 30 stocks with a 90% correlation to bitcoin’s price. With this, the company would be the first fund manager to offer the volatile crypto asset through mutual funds in Europe. However, the fund will not be a bitcoin ETF since it won’t invest in or hold BTC directly.
According to the Financial Times, French regulators approved Melanion’s ETF proposal and ruled that it meets key EU standards, known as Ucits, meaning it will be available in all of the union’s 27 member states. The Paris-based firm’s ETF has become one of the first bitcoin-related funds to receive the Ucits rating.
About The Melanion Capital Bitcoin ETF
“I haven’t seen any funds launched yet that are focused on digital assets under the Ucits umbrella,” said Winston Penhall, a funds lawyer at Keystone Law in London. How regulators view bitcoin and other cryptocurrencies is “all somewhat up in the air”, he added.
The Melanion BTC Equities Universe Ucits ETF will be equity-based. It will reportedly track its basket of 30 stocks, including mining firms Argo, Riot, HIVE. The list would also include investment firm Galaxy Digital and broker Voyager Digital. Melanion said the stocks making up the fund would have an alleged high correlation to the bitcoin market price. However, the fund won’t be holding bitcoin directly.
“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 said.
Bita a German fintech, will determine the weighting of the fund. It provides software for the calculation of financial indexes and quantitative investment strategies.
Melanion’s ETF will reportedly charge a 0.75% fee once it lists on Euronext in Paris. However, they haven’t shared the date of the listing.