Thanks to the French investment management company Melanion Capital, bitcoin now has a French passport.
Users can now launch a bitcoin exchange-traded fund (ETF). Great news for investors, traders, and crypto-users across the European Union, right?
But first, let’s circle back for a second and define what an exchange-traded fund (ETF) is. An ETF is a marketable security, an easy-to-buy-easy-to-sell form of investment that monitors an index, sector, commodity, or other assets. They can be bought and sold on a stock exchange in the same way that ordinary stocks can.
An ETF can be set up to track anything — from a single commodity's price to a large, diverse group of securities. Exchange-traded funds can even be built to follow certain investment strategies.
But an ETF doesn't have to track only one type of asset. Exchange-traded funds can hold stocks, commodities, bonds, or a combination of them.
A French BTC ETF: How Will It Work?
The game-changing Melanion Capital's new investment fund is a novelty for Bitcoin and the crypto-industry. It is the first BTC ETF approved under European Union standards as an Undertaking for Collective Investment in Transferable Securities (UCITS).
These rules are the international gold standard. They also provide access to the international market for all funds and asset management companies.
The fund is called “BTC Equities Universe UCITS ETF". In other words, it’s an exchange-traded fund that is supported by the UCITS rules.
So far, the fund will track stocks such as Argo Blockchain, Riot Blockchain, and Hive Blockchain. They will also follow the crypto investment firm Arcane Crypto.
The German fintech Bita will determine the weighting of the fund. They offer software for calculating financial indexes and quantitative investment strategies. It is worth mentioning that the fund will be listed on Euronext in Paris, and its charging fee will be 0.75%.
How Does A BTC ETF Change Anything?
Many questions and doubts have arisen since this announcement. Crypto might be in the midst of a historical moment. Governments and companies are taking it more seriously.
The new ETF comes with some regulation, even if many don’t want any sort of regulation. The truth is, having a BTC UCITS ETF approved is a huge achievement for the entire crypto-industry.
Let’s face it, the regulatory environment towards crypto hasn't been favorable. And this might be the change many were asking for. These projects will make it easier for companies to guarantee reliable crypto products for investors.
Let's be honest, crypto can be scary at first. And that's the mission this ETF has: to increase investors' confidence in crypto. It is like having training wheels for a kid learning how to ride a bike.
It is a must to make every type of investor understand that it is safe to invest in cryptocurrencies. And if the fund is approved and regulated by the European Union, even better.
Will this open the door for another crypto ETF and more regulation? Hard to say. But it does tell one thing: people and funds are more aware of crypto as a part of the future financial landscape.
And they want to be a part of it too.
