The exchange-traded fund will follow the CME Group index, the Chicago Stock Exchange.
In Brazil there are already two bitcoin ETFs, and one of them is also offered by the same firm.
QR Capital, a Brazilian financial services company, reported that it will launch the first Ethereum exchange-traded fund (ETF) in Latin America, which was approved by the Securities and Exchange Commission of that country. It has not been specified when it will be officially available.
In the Twitter thread, in which the company made the official announcement this Tuesday, July 13, 2021, it is detailed that this ETF will be listed on the B3 exchange. Its ticker will be QETH11 and it will follow the index used by the Chicago Stock Exchange, CME Group, called CME CF Ether Reference Rate.
This method of investing in cryptocurrencies can represent a form of indirect exposure for institutional investors. In this case, QR Capital is the one who has custody of the ether (ETH), which it will do through the Gemini exchange, and will sell shares that track the price of the crypto asset based on the aforementioned index.
According to the company, it is a safe and regulated option for any investor to achieve exposure to Ethereum through their preferred broker, without having to worry about registering with exchanges or the private keys to their wallets.
🔴 BREAKING: CVM approves the 1st Ethereum ETF in Latin America, or QETH11.
The QR Asset Management ETF, manager of the QR Capital group, will be listed on B3, which becomes 1st stock exchange in Latin America after a 100% Ethereum ETF. pic.twitter.com/idluRrN2zq
– QR Capital (@qrcapital) July 13, 2021
QR Capital announced on Twitter the approval of its Ethereum ETF.
QR Capital already offers its clients the possibility of investing in a bitcoin exchange-traded fund; It is called QBTC11 and at the time it was the second of its kind in Latin America, as reported by CriptoNoticias in June. The remaining bitcoin ETFs that can be accessed on Brazilian soil is Hashdex, which in March 2021 inaugurated this investment field in the country and the region.
What the arrival of the Ethereum ETF in Latin America implies
The CriptoNoticias Criptopedia explains that an exchange-traded fund is one of the most traded products on the stock market internationally. These funds can be traded on the stock market as if it were a share. ETFs can be made up of various assets, of which they track the price to replicate them in their market.
Among the advantages of an ETF, they highlight that allow you to invest with leverage even if you are inexperienced on the subject, since you do not need to safeguard your cryptocurrencies; help to diversify a wallet, since they usually contain several assets, bonds and stocks, which allow to mitigate the volatility of cryptocurrencies; and they represent a safe and regulated way of investing.
However, it is also appropriate to mention its disadvantages. A cryptocurrency ETF does not allow trading for others (i.e. trading); In other words, you can’t trade a bitcoin ETF for an ether one. Likewise, it should be noted that those who provide access to these financial services charge their commissions, and also the price reflected in the fund does not always match exactly with the current value of a cryptocurrency. Finally, the investor does not have full custody over his cryptocurrencies, but over the shares he has bought through the exchange-traded fund.