Melanion Capital launches Bitcoin Tracker ETF

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Paris-based Melanion Capital, a derivative and computer-based fund manager, has reportedly received regulatory approval to launch an exchange-traded fund (ETF) that tracks Bitcoin-related stocks for investors in the European Union (EU). However, the fund will not be a bitcoin ETF as it will not directly invest or hold BTC.

According to the Financial Times, Melanion’s ETF proposal has received approval from French regulators who have deemed it to meet key EU standards, known as UCITS, which means it will be available in all 27 member states of the union. The Paris-based company’s ETF became one of the first bitcoin-related funds to receive the Ucits rating.

“I have yet to see any funds launched focusing on digital assets under the umbrella of Ucits,” Winston Penhall, funds lawyer at Keystone Law in London, told the Financial Times. EU investors are often skeptical about investing their money in funds other than mutual funds, as the rating offers high levels of investor protection.

The Melanion BTC Equities Universe Ucits ETF will be based on stocks rather than bitcoins. It would follow a basket of up to 30 stocks, including mining companies Argo, Riot, HIVE, investment firm Galaxy Digital and broker Voyager Digital. Melanion said the stocks in the fund would have a presumed high correlation with the market price of bitcoin. However, the fund will not directly hold bitcoin.

“Most of the channels of the traditional financial system stop at access to bitcoin,” Melanion CEO Jad Comair said, according to the report. “The ETF was a real challenge due to the sensitivities and politics surrounding bitcoin and investing in bitcoin right now.”

The fund’s weighting will be determined by German fintech Bita, a provider of software for calculating financial indices and quantitative investment strategies. Melanion’s ETF would charge a fee of 0.75% once it is listed on Euronext in Paris. The registration date has not been communicated.

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