Bitcoin ETF Now Available Through Melanion Capital: Investors Preparing for BlackRock?
Are Bitcoin ETFs are the flavor of the month? | Credit: Shutterstock
Key Takeaways
- Melanion Capital’s Bitcoin Equities ETF begins trading in Netherlands.
- BTC NA’s value is tied to a basket of company stocks invested in Bitcoin and crypto services.
- Companies include stocks in MicroStrategy, Coinbase and Robinhood.
Dutch investors now have access to a new Bitcoin Equities exchange-traded fund (ETF) which is tied to stock in a number of high-profile cryptocurrency companies and invested firms.
French investment firm Melanion Capital’s Bitcoin Equities ETF (BTC NA) opened trading on the Euronext Amsterdam Stock Exchange on June 22, offering an equities-based fund that provides an alternative means to invest in the Bitcoin ecosystem.
BTC NA is tied to Melanion’s Bitcoin Exposure Index, which is a custom basket of European and North American stocks aimed at mirroring the market price of Bitcoin.
Tapping Into Big-Name Companies
The Melanion Bitcoin Exposure Index includes stocks from 30 different companies that either have major investment holdings in Bitcoin or offer cryptocurrency related services ranging from trading platforms and exchanges to Bitcoin mining firms.
The index caps exposure to any given company to around 10% of the total basket to ensure the fund remains ‘diversified, investable and scalable’. Business intelligence firm MicroStrategy currently holds 10.6% weight of the Index given its direct investment in BTC.
MicroStrategy has been accumulating BTC as part of a new capital investment scheme and to date owns over 140,000 BTC valued at over $12.6 billion as of April 2023. The company is touted to own 0.7% of the current supply of BTC.
Other notable companies that make up the index include American cryptocurrency exchange Coinbase and trading platform Robinhood. A number of high profile Bitcoin mining companies including Riot, Marathon Digital and Hut8 also make up Melanion’s stock index.
Melanion notes that it expects BTC NA to ‘achieve a high correlation’ to Bitcoin’s market performance, with the caveat that no minimum correlation threshold has been established and that the index is not guaranteed to mirror the price of BTC.
Compliant Across Europe
Melanion’s Bitcoin ETF is compliant with the European Commission’s Undertakings for the Collective Investment in Transferable Securities (UCITS) regulations. The framework is used for managing mutual funds.
A major benefit of UCITS funds is that they allow investment firms to register and sell trading products across the European Union through the provision of regulatory and investor protection requirements.
Melanion’s Bitcoin Equities ETF is also listed on the Euronext Paris and Euronext Milan stock exchanges in addition to its new addition to the Euronext Amsterdam platform.
Tremendous Interest in Digital Assets
The launch of the Bitcoin Equities ETF comes off the back of renewed interest in the cryptocurrency space following a protracted bear market.
According to Melanion Capital CEO Jad Comair, Dutch investors in particular have shown ‘tremendous interest in digital assets’ which led the investment firm to launch its BTC NA ETF on the Amsterdam-based stock exchange.
“This strategic expansion to Euronext Amsterdam reflects our commitment to providing Dutch investors with a regulated and transparent solution to participate in the Bitcoin thematic,” Comair said.
Bitcoin ETFs Back in the Spotlight
While Melanion’s Bitcoin Equities ETF differs from a spot ETF in that it is tied to the stock price of physical companies that either have BTC exposure or offer products and services related to the cryptocurrency space.
Canadian investment firm Purpose Investments broke new ground in February 2021 after receiving the green light for a Bitcoin ETF physically settled using BTC by the Ontario Securities Commission.
What was hailed as a first for the North American landscape is telling, as the United States Securities and Exchange Commission and CFTC is yet to approve a U.S.-based Bitcoin spot ETF.
The world’s largest asset manager BlackRock is looking to change that fact after applying to launch a Bitcoin ETF with the SEC in June.
Investors would buy shares of BlackRock’s proposed iShares Bitcoin Trust to gain exposure to Bitcoin without actually buying or holding BTC. As outlined in the SEC filing, Coinbase Custody would be the custodian of the underlying BTC of the ETF.
