BlackRock Expands Crypto Offerings: Ethereum ETF Debuts on Brazil’s B3 Exchange
In a significant move that underscores the growing global interest in cryptocurrency-based financial products, BlackRock, the world’s largest asset manager, has launched its Ethereum exchange-traded fund (ETF) on Brazil’s B3 stock exchange. The ETF, trading under the ticker ETHA39, began operations on Wednesday, August 28, 2024, marking another milestone in the integration of digital assets into traditional financial markets.
The new offering, officially known as the iShares Ethereum Trust (ETHA), is structured as a Brazilian Depositary Receipt (BDR), allowing local investors to gain exposure to Ethereum, the second-largest cryptocurrency by market capitalization. This launch follows the successful introduction of BlackRock’s Bitcoin ETF (IBIT39) in Brazil earlier this year, reflecting the asset manager’s strategic expansion in the crypto space.
Nicolas Gomez, BlackRock’s head of ETFs for Latin America, emphasized the significance of this launch, stating, “The introduction of ETHA39 now allows investors to have access to the two largest cryptocurrencies by market capitalization.” This move aligns with the growing demand for crypto-based products in Brazil, where the cryptocurrency market has shown robust growth.
The ETHA39 ETF is priced at approximately one-third of the original asset’s value, making it more accessible to a broader range of investors. To incentivize early adoption, BlackRock has implemented a competitive fee structure, with management fees set at 0.25% per year. However, during the first year or until the fund reaches $2.5 billion in assets under management, a promotional rate of 0.12% will apply.
Brazil has emerged as a pioneer in offering crypto-tied products on its stock exchange. With the addition of ETHA39, Brazilian investors now have access to 15 cryptocurrency ETFs or BDRs, showcasing the country’s progressive stance on digital asset investments. Felipe Gonçalves, superintendent of Interest and Currency Products at B3, reported that cryptocurrencies in Brazil now total R$5.5 billion (approximately $1 billion) in equity across funds, with an average daily trading volume of R$50 million.
The launch of BlackRock’s Ethereum ETF in Brazil comes at a time when the global market for cryptocurrency ETFs is expanding rapidly. In the United States, spot Ethereum ETFs debuted last month, generating significant interest with $1.08 billion in cumulative trading volume on their first day. BlackRock’s iShares Ethereum Trust stood out among these offerings, attracting $266.5 million in net inflows.
Cristiano Castro, director of BlackRock in Brazil, highlighted the potential of this new product, noting, “ETH has the potential to support a wide and diverse range of blockchain applications.” He added that the launch would “simplify” investor access to the asset, potentially opening doors for further innovation in the Brazilian financial market.
While BlackRock continues to focus on Bitcoin and Ethereum products, the company has indicated that it’s not currently planning to expand into other cryptocurrencies. Samara Cohen, CIO of ETF and index investments at BlackRock, recently stated that the firm is carefully considering “investability” criteria when deciding which digital assets to offer as ETFs.
