Galaxy Brings Bitcoin ETF to Brazil With TradFi Giant

Galaxy Digital is teaming up with Itaú Asset Management to launch a physically backed bitcoin ETF in Brazil, which lists on Thursday

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Galaxy Digital CEO Michael Novogratz | See Daly/"Michael Novogratz" (CC license)

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Galaxy Digital has launched a bitcoin ETF in Brazil via a partnership with Latin America’s largest private asset manager in the latest example of crypto and TradFi colliding. 

The crypto unit has teamed up with long-serving hedge fund firm Itaú Asset Management as it looks to build a full suite of physically backed crypto ETFs in Brazil. The IT Now Bloomberg Galaxy Bitcoin ETF (BITI11), which was set to begin trading on B3 Stock Exchange Thursday, is its first.

Steve Kurz, Galaxy’s global head of asset management, told Blockworks that Galaxy would likely look to bring an ether-focused ETF to Brazil through the partnership, as well as more diversified strategies. 

Galaxy is monitoring opportunities in European and Asian markets as well, he added.

“As the crypto market develops institutionally, there is a big role for blue-chip firms like Galaxy to act as a partner to large institutions that have deep client bases yet lack the in-house expertise that’s necessary to build and create high-quality crypto products,” Kurz said.

Founded in 1957, Brazil-based Itaú Asset Management oversees roughly $165 billion in assets. Its parent company, Itaú Unibanco, operates in 18 countries and has more than 65 million customers.

“This partnership combines the solidity and credibility that we have built over more than 60 years at Itaú Asset with the strength and expertise of Galaxy as one of the most experienced players in the global digital asset space,” Renato Eid Tucci, Itaú Asset Management’s head of beta strategy and ESG integration, said in a statement. 

Kurz said it was important for Galaxy to enter a country that he called “a hotbed of crypto adoption.” While multiple spot bitcoin ETFs trade on Canadian stock exchanges, the US is yet to approve a spot bitcoin ETF, despite dozens of failed applications.

Brazil-based digital bank Nubank said in September that its crypto platform had 1.8 million users. QR Asset Management launched Latin America’s first bitcoin ETF in Brazil in June 2021, and others, such as Hashdex, have also launched crypto-related funds in the country. 

The announcement comes after Galaxy on Wednesday reported a net loss of $68 million in the third quarter, an improvement from its losses of $112 million and $555 million in the first and second quarters, respectively. Crypto markets are also reeling from FTX’s implosion, with bitcoin shedding almost 24% this week, now hovering at $16,300 — its lowest point since December 2020.

Galaxy’s asset management arm handled roughly $2 billion in assets across passive, active and venture strategies, as of Oct. 31. Galaxy’s Toronto-listed stock has lost 36% over the past week and 83% in the year to date.

Galaxy’s latest partnership follows its teaming up with fund giant Invesco in September 2021. The Invesco Alerian Galaxy Crypto Economy ETF (SATO) and Invesco Alerian Galaxy Blockchain Users and Decentralized Commerce ETF (BLKC) launched in the US the following month.

The firm also partnered with Canada-based CI Global Asset Management, launching blockchain and metaverse ETFs with the company on the Toronto Stock Exchange in May.


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