Crypto-Mastermind summary:

  • After many rejections on the US and European stock exchanges to many providers, the Brazilian fund provider Hashdex lists the world’s first Bitcoin ETF.

  • The ETF was developed in partnership with Nasdaq and is expected to be available on the Bermuda Stock Exchange (BSX) by the end of the year. At BSX, the regulation is said to be more „crypto-friendly“.

  • Hashdex CEO Marcelo Sampaio sees this as an important step towards mass adoption. SEC commissioner Hester Peirce also criticizes the rejection of crypto ETF’s and says „the market is mature enough“.

Many companies and fund providers around the world have already tried to bring a Bitcoin ETF to the market. Up to now, however, regulatory authorities such as the US Securities and Exchange Commission (SEC) have continually stopped these plans. For example, the Winklevoss brothers and VanEck had made proposals, which were rejected. The Brazilian asset manager Hashdex recently managed to launch the world’s first Bitcoin ETF.

First approved Bitcoin ETF in development cooperation with Nasdaq

The SEC mainly cited high volatility or lack of protection against market manipulation as reasons for refusal. One reason for fund providers to look for alternatives. Fund manager and ex-Goldman Sachs employee Raoul Pal commented as follows:

„The registered investment advisors are so far only trying to familiarize themselves with Bitcoin. Even if some of them recognize the advantages, there is still no product with which they can trade. The regulatory requirements simply do not allow them to do so.“

The new „Hashdex Nasdaq Crypto Index ETF“ was developed in partnership with the U.S. stock exchange Nasdaq and, according to a recent report by the Brazilian financial news portal Infomoney, will in all probability be listed on the Bermuda Stock Exchange (BSX) by the end of the year. Three million shares are to be offered for trading there.

A major reason for this is the crypto-friendly regulations that apply there. The provider himself said that this choice was made because the legal hurdles there are rather low. Only these requirements would make the launch of an exchange-traded crypto-fund possible.

The ETF has to map the Nasdaq Crypto Index as well as the institutional scenario of investments in cryptocurrencies. The question, which assets exactly will be included and how they’ll be weighted will be announced by Nasdaq at launch.

Bitcoin ETF

Confident for adoption – SEC commissioner positive about Bitcoin-ETF

Even though the rules at BSX are more relaxed than in Europe and the USA, the cooperation with Nasdaq speaks a clear language and creates trust. Hashdex CEO Marcelo Sampaio sees the new ETF as an important step for a far-reaching adoption of the crypto-market. Also the access for institutional investors is made easier:

„This process should also accelerate the entry of institutional investors into this segment. It is a trend that is becoming increasingly concrete.”

Also the SEC commissioner Hester Peirce criticized the repeated rejections of Bitcoin ETF’s. Peirce is of the opinion that derivatives have already been set up and mastered for similar financial products. She believes that the product must be given the chance to prove itself under the legal requirements. For this she considers the crypto-market mature enough:

„I do think that Bitcoin markets are mature. There’s a lot of money in there now, there’s a lot of very sophisticated players in this space and there’s been a lot of work done to regularize the trading with Bitcoin particularly. I would say that the markets are mature enough to build something else on top of.”

According to Peirce, the SEC is also following the development of banking services for stablecoins based on fiat currencies. A second term as SEC commissioner has been confirmed for Pierce, which means she will be in place until 2025.

It remains to be seen whether the SEC will change its opinion on Bitcoin ETFs as a result of recent events. A listing on the U.S. stock exchanges would be another big step towards mass adoption.

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