A small Paris-based asset manager has launched Europe’s first bitcoin mutual fund in a move intended to draw institutional investor interest in the volatile cryptocurrency that has surged from $1,000 to more than $8,300 this year.
The unregulated Tobam bitcoin fund is the latest evidence that cryptocurrencies are pushing deeper into the mainstream, and comes ahead of the Chicago Mercantile Exchange’s plans to start listing bitcoin futures with a centralised clearing mechanism.
There are significant regulatory hurdles for asset managers to buy bitcoin and other cryptocurrencies, which are often associated with money-laundering and cyber theft. Unlike other currencies, bitcoins are strings of computer code, not securities. This means they are not regulated by many financial watchdogs, including the US Securities and Exchange Commission and the UK’s Financial Conduct Authority, and cannot be held by traditional mutual funds or most exchange traded funds.
Tobam’s fund is classified as an alternative investment fund, is not traded on an exchange and does not fall under the European mutual fund structure known as Ucits. However, it has daily liquidity based on market closing prices, as is the case in most Ucits mutual funds. Tobam said it required the approval of France’s financial regulator, the Autorité des Marchés Financiers, to launch the fund.