Spot Bitcoin (BTC) ETFs have nearly $100 million in assets under management in Brazil, led by the Hashdex offering

As investors continue to wait for approval of a spot Bitcoin exchange-traded fund (ETF) in the US, an audit in Brazil finds there is strong demand for such vehicles, which have been trading in that country for more than two years become.

Combined, these ETFs have $96.8 million in assets under management (AUM) as of November 21st, led by Hashdex’s Nasdaq Bitcoin Reference Price FDI (BITH11) with $57.8 million in AUM as of November 21st. November, which corresponds to a market share of around 60%. For comparison, the country’s largest ETF, iShares Ibovespa Index (BOVA11), has $2.41 billion in assets under management and the second largest, iShares BM&FBOVESPA Small Cap (SMAL11), has $1,000 in assets under management. $19 billion. For reference, the largest US ETF, the SPDR S&P 500, has around $430 billion in assets under management.

According to Marcelo Sampaio, CEO and founder of Hashdex, the success of Bitcoin ETFs in Brazil is the result of market-friendly regulation of digital assets and the growing interest of large institutions in these products.

“There is growing positive sentiment among the most sophisticated investors, and we are seeing increasing interest from some of the largest institutions, whether they are investing cryptocurrencies in their portfolios or are thinking about adding them to their portfolios soon,” Sampaio said in an interview with CoinDesk. Hashdex’s spot Bitcoin ETF began trading on August 1, 2021.

Hashdex also offers a crypto index ETF that includes BTC, ETH and other cryptos and that brings in much more investment than the spot Bitcoin ETF, Sampaio said. Combined, Hashdex’s crypto-related ETF AUM is currently around $500 million.

Hashdex is also among those with pending applications for spot Bitcoin ETFs with the US Securities and Exchange Commission (SEC). The agency last week — as it has done with other applicants recently — postponed any decision on the Hashdex application.

Other spot Bitcoin ETF providers in Brazil include Itau’s Asset Management, which teamed up with Mike Novogratz’s Galaxy Digital to launch a fund last year, and an offering from QR Capital that launched in 2021 Hashdex reported $36 million in AUM.

The Brazilian public’s interest in crypto ETFs has traditionally been high, said Gui Silva, managing partner at Tagus Capital, and the number of investors in digital asset ETFs will only continue to grow.

“There are about 4 million investors with accounts on the B3 exchange in Brazil and about 700,000 of them invest in ETFs,” he said. “About a third of these investors invested funds in crypto ETFs last year.”

According to Silva, one reason for the strong demand for ETF investments in Brazil could be the low fees. “ETF fees in Brazil range from 0.5% to 1.5% – which is considered relatively low compared to other products on the market,” he added.

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