Melanion Capital, a Paris-based derivatives fund management company, has launched a new, EU-regulated fund that aims to track the price of Bitcoin with a correlation of up to 90%.
This fund is the first of its kind to be issued under the umbrella of the EU UCITS. UCITS is the acronym for “Commitment for Collective Investment in Transferable Securities.”According to data from the European Commission, funds that meet UCITS standards account for approximately 75% All collective investments by small European investors. UCITS provides a European rather than national-level regulatory framework and imposes strict requirements on fund managers.
Melanion Capital’s fund, called Melanion BTC Equities Universe UCITS ETF, uses a beta weight-based method to “bridging” the gap between stocks and Bitcoin. As a result, it tracks a basket of up to 30 stocks in areas such as crypto mining and blockchain development, and Melanonion claims that this has a 90% correlation with BTC prices.
Cyril Sabbagh, Head of ETF at Melanion Capital, sees this product as an opportunity for investors to gain exposure to Bitcoin while eliminating risks such as loss or piracy:
“By investing in stocks that replicate the performance of Bitcoin, investors can achieve diversified asset allocation that was not possible before. Given the lack of correlation between Bitcoin and traditional assets and the UCITS characteristics of ETFs, distributors should of course be interested.”
Jad Comair, CEO of Melanion Tell The reporter learned that the fund was approved by the French financier of Autorité des Marchés [AMF] Is “a real challenge because of the current sensitivities and politics surrounding Bitcoin and Bitcoin investment.” As previously reported, there are There is no shortage of Bitcoin exchange-traded products (ETP) listed in Europe, But these are not in line with UCITS.
In the “Melanion Bitcoin Risk Index” tracked by Melanion’s ETF, crypto mining stocks account for most of the top 10 shares: sorted by weight, these stocks are currently Marathon Patent, Riot Blockchain, HIVE Blockchain, Argo Blockchain, Hut 8 Mining , Other stocks from areas such as crypto banking services and crypto asset management and trading include Arcane Crypto AB, Microstrategy, and Future Fintech.
Calculated by the German financial technology BITA, as outlined by Melanion, the index components are weighted according to Bitcoin’s Beta coefficient, which “sets an upper limit based on liquidity and rebalances and reorganizes quarterly”. The ETF will initially be listed on Euronext Paris and will charge a management fee of 0.75%.
As more and more investment tools target the field of digital assets, the regulatory approval of Bitcoin ETFs in multiple jurisdictions, especially the United States, remains worrying.Despite this, Greg King, CEO of Osprey Funds, recently stated that the number of Bitcoin ETF applications in the United States had been high earlier this year—despite U.S. regulators have long been reluctant to approve them —— Contributed to Bitcoin’s extraordinary bull market in 2021.