Institutional investors are looking for ways to participate in the cryptocurrency market without leaving the regulated area and master the advanced technologies that underpin Bitcoin (BTC), and asset managers are looking for alternative solutions to meet this need.

Paris-based investment management company Melanion Capital has partnered with the index platform Beta to launch the Melanion Bitcoin Exposure Index, according to information provided to Cointelegraph.

The index tracks a beta-weighted basket of stocks that shows the highest correlation and shows earnings in BTC to track the performance of the largest cryptocurrency in the form of a traditional equity fund.

The announcement states that the Melanion Bitcoin Transparency Index is designed to give investors “access to daily fluctuations in Bitcoin prices through a diversified basket of stocks that meet the criteria of a regular equity fund.” The index will enable banks and asset managers to offer their customers access to bitcoins in various packages, such as funds, ETFs, certificates or structured products in a format that is compatible with European law.

Using European and North American companies that operate or invest in cryptocurrencies as a basis, the index consists of 30 companies that are most closely linked to bitcoin, with a corresponding distribution of weight. Liquidity filters and weight limits are used to ensure the stability and scalability of the index.

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He noted that the approach to European regulators makes most Bitcoin-backed exchange-traded products unacceptable to institutional investors and mutual funds. Melanion Capital chairman Jad Commer said the Melanion Bitcoin Exposure Index bridges the gap between Bitcoin and EU regulation. “This indicator is a real bridge between the two worlds,” he added.

Kummer said that because it closely monitors the performance of the BTC in a diversified basket and eliminates common risks such as being lost or hacked, the index has its own set of benefits over investing directly in bitcoin.

“The main problems with Bitcoin for institutional investors are hacking, theft, loss, storage, security or crime. By investing in stocks to replicate the performance of bitcoin, investors can obtain diversified asset allocations that were not previously available. ”

Source: CoinTelegraph

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