The ‘new’ Bitcoin exposure index shows that equities that performed like bitcoin are not just growing in size and as a result are outweighting the indices that failed to perform as bitcoin.
Today we’re going to enter the Bitcoin world. That’s why we’re adding a new Bitcoin exposure index, which will show you the most Bitcoin-like stocks on US exchanges.
The Bitcoin exposure index tracks the performance of equities that look like Bitcoin, but are not directly invested in Bitcoin. The index is based on the premise that Bitcoin is an ideal benchmark for pricing and measuring the performance of all digital currencies. As a result, the index is comprised of an equal-weighted portfolio of equities that look like Bitcoin, but are not directly invested in Bitcoin. The index is rebalanced monthly, and re-weighted to maintain equal-weighted exposure.. Read more about next bitcoin stock and let us know what you think.
As institutional investors look for ways to participate in the cryptocurrency market without leaving the regulated space or mastering the advanced technology behind bitcoin (BTC), asset managers are finding alternative solutions to meet this need.
Paris-based investment management firm Melanion Capital has partnered with index platform Bita to launch the Melanion Bitcoin Exposure Index, reports Cointelegraph.
The index tracks a beta weighted basket of stocks with the highest correlation and performance of BTC to track the performance of the largest cryptocurrency in a traditional mutual fund format.
The Melanion Bitcoin Exposure Index was created to expose investors to daily changes in the price of bitcoin through a diversified basket of stocks that meet the standards of traditional mutual funds. This index will allow banks and asset managers to offer their clients the option of using bitcoin in different forms, such as mutual funds, exchange-traded funds, certificates or structured products, in a format that meets European regulatory requirements.
The index is based on companies in Europe and North America that mine or invest in cryptocurrencies, and consists of 30 companies most correlated to bitcoin, with respective weights assigned accordingly. Liquidity filters and weight restrictions are applied to ensure the stability and scalability of the index.
Related: Cryptocurrencies need a decentralized daily reference rate
Jud Comair, president of Melanion Capital, notes that the transparent approach of European regulators makes most exchange-traded Bitcoin products unacceptable to institutional investors and funds, and says the Melanion Bitcoin Exposure Index bridges the gap between Bitcoin and European regulation. This index is a real bridge between the two worlds, he added.
Because the index closely tracks bitcoin’s performance in a diversified basket and excludes common risks such as loss or piracy, it has its own advantages over investing directly in bitcoin, Komair said.
The main problems with bitcoin for institutional investors are hacking, theft, loss, storage, security or crime. By investing in stocks that track bitcoin’s performance, investors can achieve a diversified asset allocation not previously possible.
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