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Bitcoin ETF Regulations: What is the Melanion Bitcoin Equities UCITS ETF?

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Abiding by the UCITS regulations, Melanion Bitcoin Equities UCITS ETF is an innovative way for investors to tap into the Bitcoin equities ecosystem with the framework of regulated product, as it was designed following a unique methodology, which tracks a basket of up to 30 stocks in sectors such as cryptocurrency mining and blockchain technology.

The Melanion Bitcoin Equities UCITS ETF marks one of the first times European investors will be able to access the cryptocurrency space through a fully regulated and transparent product, ensuring diversification, representativeness, independence and transparency. Melanion Bitcoin Equities UCITS ETF is not just another crypto thematic ETF.

It is an ETF that was specifically designed to capture Bitcoin Thematic exposure by tracking carefully selected stocks and equities, a solution that allows investors who are interested in Bitcoin equities to invest in a regulated product.

The original methodology of the Melanion Capital solution regarding the Melanion Bitcoin Equities UCITS ETF allows investors to get exposure to the Bitcoin Thematic without any direct investment in Bitcoin or any cryptocurrency, therefore providing individual investors the opportunity to tap into the Bitcoin ecosystem within a regulated framework

Don’t put all your eggs in one basket

A common explanation of diversification is the act of “not putting all your eggs in one basket, thereby owning a mix of stocks with different business activities. This allows to reduce the overall volatility of the portfolio, compared to a portfolio composed of one or two stocks. The Melanion Bitcoin Equities ETF invests in up to 30 stocks across various sub-sectors of the crypto sphere.

And so, first and foremost, UCITS in general allows diversification, as the index complies with the 20/35 diversification ratio, which is applicable to equity and corporate index funds in Europe. The 20/35 diversification rule states that each constituent must have a weight below 20% of the total weights, except under exceptional circumstances, which ensures diversification of the ETF. Melanion Capital UCITS ETF pushes this even further by putting a cap of 10% on the components. This regulation makes sure the investor is not putting all his or her eggs in one basket and reduces the portfolio concentration

Representativeness of the Melanion Bitcoin Equities UCITS ETF

Melanion Bitcoin Equities UCITS ETF also ensures representativeness, as the companies that constitute the index are representative of the listed Bitcoin companies in Europe and North America. Indeed, the ETF allocation is split between various sub-sectors, including the Crypto Miners, the companies that operate in the Blockchain, or the ones that intervene in the crypto payments industry, among others.

Independence and transparency of the Melanion Bitcoin Equities UCITS ETF

Along with diversification and representativeness, Melanion Capital, which is the designer of the index methodology, is independent from the index calculator Bita, and the companies that are included in this index.

The ETF is also transparent as the index has a clear and systematic methodology to explain its objective and the market segment it aims to represent.  Moreover, all information regarding the index’s components, weights, and methodology are publicly available, ensuring full transparency on the whole process.

The challenge behind the ETF was to construct a UCITS-compliant fund that enables investors to tap into the Bitcoin thematic through equities, and therefore without direct investing in Bitcoin.

Melanion believes that Bitcoin is revolutionizing global finance. Nevertheless, Melanion is also convinced that Bitcoin and crypto need more regulation, to cover some of the risks inherent to cryptos such as fraud or hacking.

The objective of Melanion’s ETF is to bridge the gap between traditional finance and the crypto world by combining the regulated framework of traditional finance with the innovation of Bitcoin equities:: the regulation behind a UCITS ETF, and the potential of the Bitcoin ecosystem. Due to the lack of Bitcoin regulations and the constraints posed by the UCITS framework, a pure Bitcoin ETF does not exist yet in Europe. However, there is now a Bitcoin Equities Thematic ETF, that allows investors to get indirect exposure to Bitcoin through a diversified portfolio of companies that operate in the crypto sphere.

What about the features of the Melanion Bitcoin Equities UCITS ETF?

Depositary Bank

The assets of the Fund are held by its custodian: SGSS. In case of insolvency of the Manager, the assets of the Fund held by the Custodian will not be affected. The Custodian is required by law and The Custodian is required by law and regulation to separate its own assets from the assets of the Fund. Another perk is digital security, hacking is one of the main concerns today, all sectors and fields included, and it is safe to say that Melanion Bitcoin Equities UCITS ETF is not hackable.

Transparency 

Along with safety and security, the transparency of this solution also plays a major role, and we guarantee all the information related to our product, its index and functioning are available online for the wide public. We are firm believers that transparency is key whenever investment is involved.

Simplicity 

Investing in Melanion Bitcoin Equities UCITS ETF is as simple as buying a stock. Investors don’t even need to have a crypto wallet or an offshore account to invest, so there is no hassle whatsoever when it comes to investing in this solution. As they say, simplicity is the ultimate sophistication!

Accessibility

Melanion Bitcoin Equities UCITS ETF is accessible anytime, anywhere, as it is available across major European countries through all major banks and retail platforms, so no hassle at this level either!

Last but not least, it grants you the opportunity to be eligible for tax-efficient wrappers like life insurance and retirement plans.

Obviously, risks also need to be taken into account when it comes to any investment decision. You can learn more about the Melanion Bitcoin Equities UCITS ETF by downloading Towards Bitcoin ETFs: The Ultimate Guide, or by booking a free one-on-one call with our experts.

To sum it up, through its Bitcoin Equities UCITS ETF, Melanion Capital is opening the gates to innovative, future-forward investment, by pioneering the Bitcoin Thematic in Europe. So for those who are interested in getting Bitcoin Thematic exposure without explicitly investing in Bitcoin, this solution is for you. With the UCITS ETF regulations, you will be getting the best mix of both worlds.

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