The Brazilian Securities and Exchange Commission (CVM) authorized the launch of the Bitcoin and other cryptocurrency exchange traded fund or exchange-trade funds (ETF, for its acronym in English ), introduced by the crypto asset manager Hashdex. It is the first investment fund of its kind to be born in Latin America.
Samir Kerbage, CTO of Hashdex, made the announcement during a virtual conference in which he participated on Wednesday 17 of March. Information published on the company’s website details that the product tracks the Nasdaq Crypto Index (NCI), developed by Nasdaq and Hashdex, and is presented as an option for institutional investors gain exposure to the cryptocurrency market.
The Hashdex ETF replicates the composition of the NCI which is based on 6 crypto assets, bitcoin (BTC), ether (ETH ), the native cryptocurrency of the Ethereum network, litecoin (LTC), Chainlink (LINK), Bitcoin Cash (BCH) and Stellar (XLM).
The ETF offers several entry points, since investors can gain exposure by investing in the Hashdex Nasdaq Crypto Index through various investment platforms linked to the Sao Paolo Stock Exchange or the Bermuda Stock Exchange (BSX), the Bermuda Stock Exchange.
Brazilian investors will be able to access through the group of operators managed in the country by Hashdex, including: XP, BTG, Rico, Órama and Genial. Also non-US organizations can enter through operators in BSX. Whereas, United States entities will only be able to invest through private placement , as explained on the website.
According to some digital media, the minimum collection to make the ETF offer viable is 250 million reais (USD 45 millions). It will be traded with the ticker HASH11.
Bitcoin ETFs are exchange-traded funds that track the value of the queen cryptocurrency and are traded on traditional markets rather than on cryptocurrency exchanges.
With these investment alternatives, the price of a share of the exchange-traded fund fluctuates with the price of bitcoin (BTC). If the value of the crypto asset increases, so does the ETF, and vice versa. Instead of being listed on a cryptocurrency exchange, the ETF is listed on a stock exchange. Under this formula, investors do not buy BTC directly, but rather a share which follows the price of this asset.
A new wave of institutional interest in bitcoin
A new wave of institutional interest has fueled bitcoin recently already As institutional interest in cryptocurrencies grows, other market players are also considering launching their own ETFs. Such is the case of Grayscale, which is looking for experts in exchange-traded funds, making it clear that it would soon seek approval from the United States Securities and Exchange Commission (SEC) to offer a more exclusive investment instrument.
However, so far the SEC is still evaluating the entry of these assets to its bag. Several await approval, one of them is Van Eck, whose application is still pending.
In other parts of the world such as North America, several bitcoin ETFs have already been authorized by regulators. As CriptoNoticias reported, in Canada, the investment management company CI Global Asset Manager is the third firm to be listed on the Toronto Stock Exchange with these products.