Breaking: BlackRock Rolls Out Ethereum ETF In Brazil Via BDR

BlackRock has launched its Ethereum ETF, which will begin trading in Brazil on Wednesday, August 28, 2024. The ETF will be available on the B3 stock exchange under the ticker code ETHA39, marking an expansion of the firm’s cryptocurrency offerings in the Brazilian market.

BlackRock Expands Crypto Offerings in Brazil

BlackRock has announced the launch of its Ethereum ETF on Brazil’s B3 stock exchange. The new ETF, trading under the ticker ETHA39, will provide Brazilian investors with exposure to Ethereum, the second-largest cryptocurrency by market cap. This move follows the earlier introduction of BlackRock’s Bitcoin ETF in Brazil, which debuted in March 2024 under the ticker IBIT39.

ETHA39 represents a fraction of the iShares Ethereum Trust (ETHA), with each BDR unit priced between R$40 and R$50. The exact price will be determined based on the ETF’s performance in the US market. In the meantime, The firm is waiving the management fee for ETHA39 for the first year, reducing the fee from the standard 0.25% to 0.12% for assets under management up to US$2.5 billion.

The ETF’s structure as a Brazilian Depositary Receipt (BDR) means it is a certificate representing shares of a foreign company, in this case, BlackRock’s iShares Ethereum Trust, but traded locally on B3. While BDRs are subject to similar taxation as domestic shares, they do not offer tax exemptions for transactions below R$20,000 per month, a factor investors should consider when managing their portfolios.

Strong Demand for Crypto ETFs

The launch of ETHA39 reflects growing demand for cryptocurrency-related investment products in Brazil. According to Nicolas Gomez, the firm’s head of ETFs, index investments, and products for Latin America, there has been “robust demand” for the Bitcoin ETF BDR, which encouraged the company to expand its offerings to include ETH.

BlackRock’s iShares Ethereum Trust in the United States has also seen rapid growth, surpassing $1 billion in cumulative net inflows as of August 2024. As a result, this achievement marked  the first U.S. spot Ethereum exchange-traded fund (ETF) to reach this milestone, according to Farside Investors’ data.

The leading contributor to this surge was IBIT ETF, which alone attracted $224.1 million in inflows, according to Farside UK data. This strong performance underscores the growing interest from institutional investors, which has likely influenced the decision to bring the ETH ETF to the Brazilian market.

Concurrently, the Brazilian market has shown increasing receptiveness to digital asset products. Beyond Bitcoin and Ethereum, the Brazilian Securities and Exchange Commission (CVM) has recently approved two Solana-based ETFs to be listed on B3, signaling a broader acceptance of blockchain-based investments.