Brazil Launches Its First Eco-Friendly Bitcoin ETF (BITH11)



Brazil continues to make progress in creating new investment opportunities related to cryptocurrencies. This week, it launched a brand new Bitcoin ETF —with a green twist. Under ticker BITH11, the Hashdex Nasdaq Bitcoin Reference Price replicates the performance of the Nasdaq Bitcoin Reference Price Index. This would, in turn, be the second ETF available in Brazil, offering 100% exposure to Bitcoin, competing against the QR CME CF Bitcoin Reference Rate or QBTC11 that was also recently approved.

Brazil Has a New Eco-Friendly Bitcoin ETF

But Hashdex’s proposal differs from its QR Assets-managed competitor. It seeks to neutralize carbon emissions from Bitcoin investments.

The so-called First Green Bitcoin ETF in Brazil will use audits by Germany’s Crypto Carbon Ratings Institute (CCRI) to determine the environmental impact of BITH11 investments, allowing it to invest 0.15%  of its liquid assets in carbon credits and eco-friendly technologies every year.

Rogerio Santana, director of the B3 (Brazil’s main stock exchange), highlighted the importance of this initiative, noting that in addition to complying with the country’s legal regulations, BITH11 promotes a positive impact not only on the industry but also on the entire ecosystem. He was also proud to have one of the most extensive cryptocurrency investment offerings in the whole region.

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“The new ETF offers investors exposure to the variability of the world’s leading digital asset, with all its growth potential and store of value, in a regulated, secure and sustainable manner With the introduction of this ETF, we will also increase B3’s range of ESG products available to the market.”

What is Bitcoin ETF?

An exchange-traded fund, commonly known as an ETF, is a type of investment fund that tracks the price of an underlying asset, such as gold, oil, an index, or a basket of stocks. It is traded on a stock exchange as well as shares. This means that all investors, whether retail or institutional, may purchase and sell securities held in an ETF with other equity market participants.

 ETFs can usually cheaper than mutual funds as they are usually set up as passive index-tracking funds, and they allow investors – even private investors – to gain access to asset classes and niche markets in which it would otherwise be difficult to invest.

Bitcoin ETF, such as the one proposed by the Winklevoss twins, would have the digital currency bitcoin as an underlying asset. That means that by purchasing a bitcoin ETF, an investor would be indirectly purchasing bitcoin, as he or she would be holding the bitcoin ETF in a portfolio as opposed to the actual digital currency itself. However, as the ETF would closely track the price of bitcoin, for the investor it should make little difference whether he or she is holding a bitcoin ETF or the actual digital currency.

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The main difference between buying a bitcoin ETF versus bitcoin it would be that investors would be purchasing a regulated investment vehicle that they can buy and sell on exchanges instead of having to buy and securely store bitcoin.

This would, in turn, be the second ETF managed by Hashdex. The first one, HASH11, or Hashdex Nasdaq Crypto Index, replicates the performance of the Nasdaq Crypto Index (NCI), which tracks a theoretical basket of various cryptocurrencies such as Bitcoin, Ethereum, Chainlink, Bitcoin Cash, and Stellar Lumens.

In addition to this offering, a few days ago, the first 100% Ethereum ETF was also approved. The QR CME CF Ether Reference Rate, or QETH11, is managed by QR Assets and tracks the price behavior of ETH through the CME CF Ether Reference Rate.

In this way, Hashdex and QR Assets control the Brazilian crypto ETF market. The two investment firms have also positioned the country on the podium of places with the most diverse exposure to cryptocurrency ETFs.

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A Growing Crypto Ecosytem

Brazil has a pretty strict regulatory system as far as crypto investments are concerned, however, the country is also undertaking a major regulatory reform specially thanks to its regulatory sandbox. Also, a growing ecosystem of service providers has washed the face of the whole crypto industry.

Services like Bank, Alter, and Uzzo Pay allow users to have a free bank account with the option to buy and sale Bitcoin at market prices. Users can also pay with prepaid credit cards that use the money from their fiat accounts.

Also, the popularity of crypto exchanges has spiked. Binance is now consolidated as the top choice despite the resignation of its country manager, but other services like Biscoint, Mercado Bit Coin, Ripio and Satoshitango are also expanding as the most interesting in crypto rises.

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