Brazil Bitcoin ETF Follows Similar Launches in Canada

Latin America’s first such product begins trading as SEC continues mulling proposed offerings in the US

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Rio de Janeiro, Brazil; Source: Shutterstock

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key takeaways

  • Investment offering comes after several 2021 bitcoin ETF launches on Toronto Stock Exchange

The first ETF in Latin America with 100% exposure to bitcoin has launched in Brazil, joining others in countries like Canada while the Securities and Exchange Commission continues to mull its decision on bitcoin ETFs in the US.

QR Asset Management’s investment offering, known as QBTC11, officially hit the Brazilian Stock Exchange, also known as B3, this week. The Brazilian Securities and Exchange Commission had approved the product in March alongside an ETF by Hashdex, which offers exposure to a variety of cryptocurrencies. 

QR’s ETF uses CME Group’s bitcoin futures contracts index as a reference, the fund group said in a March tweet. It allows investors to no longer worry about wallets or private keys to gain exposure to the cryptocurrency, and is authorized by B3 and Brazilian capital market regulatory institution CVM, the firm added. 

“The purpose of the ETF is to provide exposure to Bitcoin easily and securely,” QR tweeted. “…But, more importantly, QBTC11 places Brazil at the epicenter of the most modern financial regulation.”

QR Asset Management did not immediately respond to Blockworks’ request for further comment. 

The bitcoin ETF launch further highlights the contrasting views about bitcoin and crypto for governments and regulators around the world, as El Salvador became the first country to formally adopt bitcoin as legal tender earlier this month and China this week intensified its crackdown on the industry. 

Purpose Investments in February launched the first bitcoin ETF in Canada on the Toronto Stock Exchange, reaching $1 billion (CAD) after several weeks on the market. Since, Evolve’s Bitcoin ETF (EBIT), The CI Galaxy Bitcoin ETF (BTCX) and the 3iQ CoinShares ETF (BTCQ), have also launched in Canada.  

The Ontario Securities Commission recently grew more comfortable with investment-grade custody and infrastructure services, as well as a workflow to allow for daily liquidity Brian Mosoff, CEO of Ether Capital, previously told Blockworks.

Meanwhile, the SEC has postponed its decision on several of the nearly a dozen US bitcoin ETFs in registration. The agency earlier this week extended its deadline to consider Valkyrie Digital Assets’ application for a bitcoin fund as industry watchers said the SEC looking to mitigate against market manipulation, hacks and theft in space.

The decision by Brazil regulators to approve a bitcoin ETF does not signal that they are ignoring such concerns, Sumit Roy, an analyst and senior staff writer at ETF.com, told Blockworks.

“They are simply weighing all the considerations and coming to the conclusion that the benefits outweigh the negatives,” he said. “There is also a school of thought that bitcoin is no more prone to manipulation than any other market, especially as it has grown to a substantial size with a wide investor base and a pretty robust ecosystem surrounding it.” 

The bitcoin law of fellow South American country El Salvador is reportedly expected to go into effect in September, and each citizen will be able to receive $30 in bitcoin once they sign up for the Chivo e-wallet using facial recognition.

Roy added that he doubts many US investors will buy the Brazil bitcoin ETF, noting that there has not been a large uptake of the Canadian bitcoin ETFs in America.  

“Buying foreign securities in a U.S. brokerage account is onerous,” he added. “They will likely stick with GBTC, OBTC and the like until a bitcoin ETF is approved.”

Several blockchain ETFs, such as the recently proposed Invesco Crypto Economy ETF, also offer US investors exposure to digital asset companies and bitcoin futures.   

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