New Crypto ETF in Bermuda May Help Institutional Inflow

With resistance from US financial regulators still remaining, a Brazilian company has received approval to list a crypto-focused exchange traded fund (ETF) on the Bermuda Stock Exchange. And according to the man behind the ETF, increased institutional interest in crypto may follow the listing later this year.

The exchange said that it is the Brazilian asset management firm Hashdex that proposed and received approval to list the new ETF in Bermuda, where it will trade under the name Hashdex Nasdaq Crypto Index ETF.

Unlike the many ETF proposals that have been rejected over the years in the US, however, Hashdex’s new offering will not be backed solely by bitcoin (BTC), but will instead be based on a “blockchain index” made up of several cryptoassets, developed by Hashdex in partnership with exchange operator Nasdaq, according to Brazilian newspaper O Globo.

“This launch will validate our thesis that institutional investment in the digital assets segment should grow significantly in the coming years,” Marcelo Sampaio, Co-founder and CEO of Hashdex, told the newspaper, suggesting that it is the country’s more flexible regulation for digital assets that made them choose Bermuda.

According to O Globo, the new ETF is expected to go live on the Bermuda Stock Exchange between November and December this year.

However, other key details, such as specific makeup of the index, are still scarce, with Hashdex stating that this will be made available upon product launch.

And although the US Securities and Exchange Commission (SEC) has opposed several proposals for listing crypto and bitcoin-backed ETFs in the US in the past, various products for getting exposure to crypto via public stock exchanges do exist around the world. Among these is a bitcoin-based exchange traded note (ETN) in Sweden, and a multi-crypto exchange traded product (ETP) available in Switzerland.

In the US, meanwhile, crypto exposure can also be achieved for traditional investors through a range of funds offered by Grayscale Investments, which are traded in the over-the-counter (OTC) market where they are not subject to disclosure and reporting requirements from the SEC.
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