New Bitcoin Exposure Index to track stocks that work like BTC
Institutional investors looking to get into the crypto market without leaving the regulated space or mastering the cutting-edge technology behind Bitcoin (BTC) and asset managers looking for alternative solutions to meet demand.
According to information shared with Cointelegraph, Paris-based investment firm Melanion Capital has partnered with index platform Bita to launch the Melanion Bitcoin Exposure Index.
A beta-weighted basket of stock tracking index that has the highest correlation and turnover ratio with BTC to track the performance of the largest cryptocurrency in a traditional hedge fund format.
The Melanion Bitcoin Exposure Index was developed to give investors “exposure to daily Bitcoin price movements through a diversified basket of stocks that conform to traditional mutual fund standards,” the announcement said. This index will enable banks and asset managers to offer their clients Bitcoin exposure in various forms such as hedge funds, exchange traded funds, certificates or other products, structured products in a format that complies with European regulations.
Based on companies based in Europe and North America that are active in or invest in the crypto space, this index contains the 30 companies that are most strongly correlated with Bitcoin, whereby their weighting is given according to the respective allocation. Liquidity filters and weighting limits are applied to ensure the stability and scalability of the index.
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Melanion Capital President Jad Comair, recalling that European regulators’ scrutiny approach makes the majority of Bitcoin-backed exchange-traded products unsuitable for institutional and fund investors, says Melanion’s Bitcoin Exposure Index bridges the gap between Bitcoin and the EU regulation closes. He added, “This index is a real bridge between the two worlds.
Because it closely tracks the performance of BTC in a diversified basket and eliminates the usual risks like loss or hack, the index has its own advantages over investing directly in Bitcoin, Comair said.
“The main concern of Bitcoin for institutional investors is hacking, theft, loss, storage, security or crime. By investing in stocks that track Bitcoin’s performance, investors can achieve a previously unavailable diversified asset allocation. “