Recently, Tobam, a French-based asset management company declared the launch of Europe’s first mutual fund, actively based on Bitcoin. The company stated that more Cryptocurrencies are being created in the modern market, with Bitcoin holding the largest market capitalisation, and also being the most liquid of all these currencies. However, despite the growing interest in digital currencies, there are only handful solutions available to people, as most of them pose several difficulties for investors.
The company’s mutual fund plans wish to target institutional and qualified investors wishing to gain exposure of the Cryptocurrency. The company also admits that while Bitcoin is vulnerable to various risks, like a high level of volatility, it can also provide several diversification benefits. Tobam also believes that Bitcoin and all other Cryptocurrencies have the necessary potential to become durable assets in saving and financial market.
The head of business development of the firm stated that, direct investment into the popular Cryptocurrency can be challenging in a number of ways, from dealing with the problem of selecting an ideal platform, to maintain proper security protocols and measures while keeping it, while also managing any modifications made to the original protocol, such as hard forks. The goal is to take control of all such challenges in order to provide access to qualified investors prepared to gain exposure to Bitcoin, under a designed format of a mutual fund.
An Alternative Investment Fund
The company’s creator, Mr. Choueifaty, claims that AMF had to be convinced that cryptocurrency’s fund’s designated format is protective of its investors. He further stated that developing legitimate methods would eventually mean to invest in Bitcoin and other Cryptocurrencies quite elaborately.
Currently, the mutual fund is being registered as an alternative investment fund, meaning it will not be covered by European Directive on UCITS (Undertakings for Collective Investment in Transferable Securities). Due to this, the company’s fund is not traded through an exchange, and will essentially, only be available to, as the company states, “qualified investors”.
The fund is made available to eligible investments all across the world on the basis of private placement, due to its legal status as an alternative investment fund.
Tobam is the first of its kind company, but surely not the last of its kind. With Cryptocurrency becoming more mainstream and with the recent surge of Bitcoin, a number of people is eventually going to come up with some systematic investment plans regarding Cryptocurrency. And sooner or later, with the increasing popularity, there are going to be some guidelines being made onto the usage of these through the government.
Only with time will we be able to know about the potential future and profit that Bitcoin mutual funds holds for its investors.