Europe’s first mutual fund to invest in bitcoin has been established in Paris, in a move designed to encourage more interest from institutional investors.
Parisian asset management company Tobam set up the fund to provide a mechanism for large institutional investors to take positions in bitcoin, as the currency continues its meteoric rise through 2017.
At the start of the year, bitcoin was trading at around $1,000. Despite several volatile price swings along the way, bitcoin’s value currently stands at over $8,300, which Tobam hopes will serve as a trigger for more mainstream financial institutions to get involved.
The news is being interpreted as the latest evidence of a maturing market for bitcoin, which continues to draw increasing attention from the mainstream financial world.
Notable developments include the recent decision by the Chicago Mercantile Exchange, which is set to offer bitcoin futures through a centralized clearing function in the imminent future.
Tobam’s fund is unregulated, but has been set up to provide a more straightforward mechanism for investment funds to access alternative currency markets.
Due to compliance requirements, the regulatory barriers to investing in bitcoin are seen as a key factor in limiting their greater adoption at an institutional level. According to Yves Choueifaty, the founder of the fund, this extends to the AMF, France’s financial regulator, which will need to approve the fund before it can go live.
“How to run the money and invest in cryptocurrencies is quite elaborate…We found some investors to launch the fund and we have had a lot of interest from an intellectual point of view.”
He added that it would be seen as a disappointment if the fund hadn’t grown to at least $400 million in the next couple of years, underlining the optimism around bitcoin and cryptocurrency investments.
The announcement of the fund, which already has initial investor backing, is seen as something of a watershed moment in European financial circles, which could spark a much wider adoption of bitcoin at an institutional level.
If the fund proves attractive to institutional investors, this could spell yet further upwards price pressure for bitcoin in the months and years to come.