The biggest stock exchange in Brazil recently listed a crypto exchange-traded fund (ETF). The ETF outperformed the minimum expected fund amount of R$250 million and raised a whopping sum of R$615 million from investors. B3 is Brazil’s biggest stock exchange and it has taken the bold step of including crypto compositions on its portfolio list.
At the moment, the Brazilian ETF gives room for investors to buy shares in Bitcoin, Ethereum, Chainlink, and Litecoin. Crypto ETFs are mimics of cryptocurrencies on exchanges. However, ETFs are available on stock exchanges rather than crypto exchanges and are also regulated. An ETF investor buys shares from a crypto index, the crypto index, in turn, invests the funds in crypto assets.
This model is welcomed by some investors who do not want to own crypto assets directly but want to profit from the crypto ecosystem. Owners of personal cryptocurrencies are sometimes at the risk of losing their wallet keys and dealing with some other complications in the relatively new ecosystem. Also, crypto ETFs are regulated by the country’s SEC. This could be both an advantage and a disadvantage for some users.
Will More Countries Adopt This Model?
Exposure to the crypto markets has been facilitated through the fully regulated exchange. This is the first crypto ETF in Brazil. At the moment, the United States of America is replicating this model of tapping from the crypto ecosystem. Canada on the other hand already has a crypto ETF.
Since the recent appointment of a new SEC chairperson in the United States, a lot of crypto fans in the US have been expecting more supportive governmental laws to the crypto ecosystem in the US. This could drive the success of a US-based Crypto ETF.
The huge amounts of funds raised from the ETF launch prove that crypto adoption in Brazil, as well as the rest of the world, is booming as each day passes by. More countries may set up crypto ETFs sooner or later.