Paris-based Fund Manager to Launch Fund With Up to 90% Bitcoin Price Exposure

French asset manager Melanion Capital is set to launch an EU-regulated fund that closely tracks the price of bitcoin, according to a Financial Times report on Wednesday. If successful, this will be the first time that investors in the region will be able to get exposure to Bitcoin through a mutual-fund investment vehicle.

To be clear, the fund won’t be directly investing in Bitcoin. Instead, the fund will track up to 90% of stocks correlated to the price of bitcoin. This will include a basket of up to 30 stocks in sectors such as cryptocurrency mining and blockchain technology.

Melanion Capital is a Paris-based company and a derivatives fund manager. The firm recently received approval from the French regulator to launch an exchange-traded fund that complies with EU standards known as Ucits.

Ucits funds are sold across the EU and are also popular in Asia and Latin America. They are seen as an international gold standard of fund regulation and form the bulk of European mutual funds and offer high levels of investor protection.

The interpretation of the rules that govern Ucits funds makes it almost impossible to launch one that directly holds or predominantly invests in bitcoin. However, by launching a vehicle that tracks the price of Bitcoin via securities of companies in the sector, Melanion Capital will be giving mainstream investors an alternate route to tap into the burgeoning industry.

The launch highlights how fund firms are becoming increasingly innovative, at a time when financial regulators around the world are often skeptical or slow-moving when it comes to the fast-evolving crypto market.

Admittedly, Melanion Capital is one of the many asset managers globally that now offer investors exposure to Bitcoin either directly or indirectly. A range of firms in the US, including Cathie Wood’s Ark Invest, are taking it a step further with plans for a bitcoin ETF.

Ark Invest also holds and continues to accumulate shares in Grayscale’s Bitcoin Fund, adding significant value to its position during the recent Bitcoin market correction.