Galaxy brings Bitcoin ETF to Brazil with TradFi Giant

Galaxy brings Bitcoin ETF to Brazil with TradFi Giant

Galaxy Digital has launched a Bitcoin ETF in Brazil through a partnership with Latin America's largest private asset manager, in the latest example of crypto and TradFi colliding.

The crypto unit has partnered with long-standing hedge fund firm Itaú Asset Management to build a full range of physically backed crypto ETFs in Brazil. The IT Now Bloomberg Galaxy Bitcoin ETF (BITI11), which was scheduled to begin trading on the B3 Stock Exchange on Thursday, is the first.

Steve Kurz, Global Head of Asset Management at Galaxy, told Blockworks that Galaxy will likely look to bring an Ether-focused ETF as well as more diversified strategies to Brazil through the partnership.

Galaxy is also monitoring opportunities in European and Asian markets, he added.

“As the crypto market develops institutionally, there is a big role for blue-chip companies like Galaxy to serve as a partner to large institutions that have large customer bases but lack the in-house expertise needed to build and create high-quality crypto products,” Kurz said.

The Brazilian company Itaú Asset Management, founded in 1957, manages assets of around 165 billion US dollars. Its parent company, Itaú Unibanco, operates in 18 countries and has more than 65 million customers.

“This partnership combines the solidity and credibility that we have built at Itaú Asset over more than 60 years with the strength and expertise of Galaxy as one of the most experienced players in the global digital asset space,” explains Renato Eid Tucci, Itaú Asset Management’s head of beta strategy and ESG integration, said in a statement.

Kurz said it was important for Galaxy to enter a country he called “a hotbed of crypto adoption.” While several spot Bitcoin ETFs are trading on Canadian exchanges, the US has yet to approve a spot Bitcoin ETF despite dozens of failed applications.

Brazil-based digital bank Nubank said this in September its crypto platform had 1.8 million users. QR Asset Management launched Latin America's first Bitcoin ETF in Brazil in June 2021, and others, such as Hashdex, have also launched crypto-related funds in the country.

The announcement comes after Galaxy on Wednesday reported a net loss of $68 million in the third quarter, an improvement from losses of $112 million and $555 million in the first and second quarters, respectively. Crypto markets are also reeling from FTX's implosion, with Bitcoin losing nearly 24% this week and now hovering at $16,300 - its lowest level since December 2020.

Galaxy's asset management arm managed approximately $2 billion in assets across passive, active and venture strategies as of Oct. 31. Toronto-listed Galaxy shares have lost 36% in the past week and 83% in the year to date.

Galaxy's latest partnership follows its collaboration with fund giant Invesco in September 2021. The Invesco Alerian Galaxy Crypto Economy ETF (SATO) and the Invesco Alerian Galaxy Blockchain Users and Decentralized Commerce ETF launched in the US the following month.

The company also partnered with Canada-based CI Global Asset Management and launched blockchain and metaverse ETFs with the company on the Toronto Stock Exchange in May.

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The post Galaxy brings Bitcoin ETF to Brazil with TradFi Giant is not financial advice.