Brazilian Stock Exchange approves two new crypto ETFs in Latin America

Brazil’s Securities and Exchange Commission (CVM) this week approved two cryptocurrency ETFs – one made up of 100% bitcoin and another containing five other cryptocurrencies in addition to bitcoin (BTC).

For QR Asset Management, a manager of bitcoin-only ETFs, the product could accelerate the launch of a similar product in the U.S., as the MVC and the Securities and Exchange Commission, or SEC, are part of the International Organization of Securities Commissions, or IOSCO.

Both ETFs will be traded on the Brazilian exchange, B3. According to Brazil Journal, the country’s two largest banks, Itaú and BTG Pactual, have already announced that they will offer Hashdex ETFs to their clients.

The QR ETF is traded on B3 with the ticker QBTC11 and on Hashdex with HASH11. The HASH11 ETF will begin trading this month and the QBTC11 ETF will begin trading in Q2 2021.

In the case of a QR ETF, the index used to calculate the bitcoin price will be the Chicago Mercantile Exchange.

Fernando Carvalho, CEO of QR Capital, the holding company of QR Asset, sees this initiative as an important step of innovation in the Brazilian capital market. In an internal communication to Cointelegraph, he stated:

Our ETF, traded under the ticker symbol QBTC11, is an important move in the Brazilian market. Thus, the asset acts as a double hedge as it is a digital asset while being traded on the global dollar market. Its price is not tied to other asset classes, so it is increasingly used by large managers and investors as part of diversified portfolios.

The Hashdex ETF will track the Nasdaq Crypto Index (NCI) developed by Nasdaq and Hashdex. In September 2020, Brazil-based Hashdex received approval from Bermuda’s regulator and joined Nasdaq in approving the world’s first bitcoin ETF, the Hashdex Nasdaq Crypto Index ETF.

Apart from Brazil, Canada is the only other country that has allowed its own bitcoin ETFs.

NCI consists of six cryptocurrencies: Bitcoin, Ethereum (ETH), Stellar (XLM), Litecoin (LTC), Bitcoin Cash (BCH) and Chainlink (LINK), and is rebalanced quarterly.

Hashdex’s assets on deposit are held by companies like BitGo, Coinbase, Fidelity and Gemini, all of which are indirect and regulated in the US.

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