Based in Paris, Melanion Capital is a derivative and computer-led fund manager expanding into digital assets, recently from French regulators. EU standard Known as Ucits.
The fund tracks baskets of up to 30 shares in sectors such as cryptocurrency mining and blockchain technology. This correlates up to 90% with Bitcoin prices, says Melanion.
The announcement highlights how fund companies are becoming more creative in the face of often skeptical or slow-moving financial regulators in the rapidly evolving world of digital assets.
Winston Penhall, a fund lawyer at Keystone Law in London, said: “Everything is a bit in the air,” he added, as to how regulators view Bitcoin and other cryptocurrencies.
The Ucits fund, which is sold throughout the EU and is also popular in Asia and Latin America, is considered the international gold standard for fund regulation. They form the majority of European investment trusts and provide a high level of investor protection. However, their rules were first established over 30 years ago and do not directly correspond to cryptocurrencies like Bitcoin.
Regulators in most countries interpret it as meaning that digital assets cannot be held directly in a fund unless they are linked to a listed security. As a result, it is nearly impossible to launch a Ucits fund that can be sold block-wide and primarily invests in Bitcoin with safeguards for consumers.
“Most pipes in the traditional financial system stop at access to Bitcoin,” said Jade Comair, CEO of Melanion. “ETFs were a real challenge because of the sensibilities and politics surrounding Bitcoin and Bitcoin investment.”
Among the top holdings of the Melanion index, tracked by the fund and calculated by FinTech Vita of Germany, are crypto miners Argo blockchain and Riot blockchain, investment manager Galaxy Digital, led by entrepreneur Mike Novogratz, brokers. There are stocks such as Voyager Digital. Stocks are weighted based on how sensitive they are to Bitcoin price movements.
“We are aware of both the significant opportunities and significant risks associated with crypto assets,” the Irish Central Bank said last year. However, EU regulator Esma said in March this year that “some crypto assets are very risky” and that most are not regulated in the EU.
There are many exchange-traded funds and products that track Bitcoin, such as the $ 242 million Wisdom Bitcoin ETP. They are regulated as securities, but there is no coveted Ucits wrapper.
In the United States, various fund companies include: Cathie Wood Arc Invest, Securities and Exchange Commission I haven’t given approval yet.
A French fund called the Melanion BTC Equities Universe Ucits ETF is listed on Euronext in Paris with a 0.75% commission.
