Based in Paris Melanion Capital successfully introduced its bitcoin equity ETF on Euronext Paris.

The launch of the fund – the Melanion BTC Equities Universe UCITS ETF (BTC FP) – marks the first listing of a UCITS product linked to bitcoin in Europe.

The UCITS wrapper means retail and institutional investors across the EU can invest in it with the same regulatory standards and protections associated with a traditional UCITS ETF.

The fund follows the Bitcoin Melanion Exposure Index, which according to its creators has up to 90% correlation with the price of bitcoin.

The index was designed in-house by Melanion and is administered by the German fintech index BITA.

The methodology behind it aims to bridge the gap between equities and bitcoin by capturing the performance of a select universe of companies listed on regulated US, Canadian and European exchanges that exhibit the correlation and exposure to income. highest to bitcoin.

To be eligible for inclusion, a business must either derive at least 50% of its revenue from the management and trading of crypto assets, crypto banking and related services, cryptocurrency mining, and the provision of hardware. mining, or blockchain technology, or, failing that, must hold cryptocurrency assets on its balance sheet, either as cash and receivables or as investment assets, of at least 10 millions of dollars.

Companies must also have a market capitalization greater than $ 100 million and an average daily traded value of at least $ 500,000.

The constituents of the index are weighted according to their beta coefficient with bitcoin, capped according to liquidity, and rebalanced and replenished on a quarterly basis. The number of index components is limited to 30.

Beta coefficients are calculated as the covariance between the constituent weekly returns and the weekly bitcoin returns divided by the variance of the weekly bitcoin returns.

Notable constituents currently include Argo Blockchain (8.7%), Bit Digital (6.4%), Marathon Digital (6.3%), Riot Blockchain (5.8%), Hut 8 Mining (5.2%) , Bitfarms (4.9%), HIVE Blockchain Technologies (4.9%, Galaxy Digital (4.8%), MicroStrategy (4.6%) and BIT Mining (4.4%). end of September).

Jad Comair, CEO of Melanion Capital, said: “There is a very strong demand from institutional investors in Europe to gain transparent and reliable exposure to bitcoin, which is why we have launched our ETF proposal.

The asset manager has expressed the wish to deploy the ETF on other exchanges.

“We are also preparing listings in Frankfurt, London, Milan and Amsterdam and then possibly in other locations depending on interest,” Comair said in a pre-registration interview with French newswire Finascope.

“The procedures will take a few months. The timing does not depend on us, but rather on the technical and administrative intricacies of the different countries, with regulators, stock exchanges and intermediaries such as custodians.

GHCO has been appointed ETF liquidity provider. As a market maker and authorized participant, GHCO will ensure that institutional investors have access to abundant liquidity and are quoted with tight spreads.

Dan Izzo, CEO of GHCO, said: “This launch marks another important milestone in the rise of regulated financial products related to crypto. As digital assets continue to mature as an asset class, we expect to see increased demand for these types of products. “

The ETF has a total expense ratio of 0.75%.