Galaxy Digital has teamed up with Brazilian Itaú Asset Management to develop Bitcoin Exchange Traded Funds (ETFs) in Brazil, in the latest example of the crypto and TradeFi intersection. Citing the Global chief of assets management at Galaxy Digital, Steve Kurz, on a Twitter post:
“Excited to partner with Itaú Asset Management to bring institutional-grade crypto ETFs to the Brazilian market!”
Itaú Asset management is a long-standing company established in 1957 in Brazil and manages almost a billion dollars worth of assets. The hedge fund company’s core business, dubbed Itaú Unibanco, has 18 locations worldwide with a record of at least 65 million users since inception.
The collaboration between the crypto unit and its new asset management partner comes as the two players look to develop a comprehensive spectrum of genuinely backed crypto ETFs in the South American country.
“The partnership between Galaxy Digital and Itaú Asset Management is meant to develop a comprehensive spectrum of genuinely backed Bitcoin ETFs in Brazil.”
The IT Now Bloomberg Galaxy Bitcoin ETF (BITI11) leads the vision, slated to commence trading on the B3 Stock Exchange directly come Thursday, November 17.
Galaxy’s move to collaborate with Itaú Asset management is the company’s latest expansion move, slightly more than a year after partnering with fund powerhouse Invesco in September 2021. This set a precedent for releasing the Invesco Alerian Galaxy Cryptocurrency.
Economy ETF (SATO) and the Invesco Alerian Galaxy Blockchain Customers and Decentralized Commerce ETF in the U.S. in October 2021.
Galaxy partnered with Canada-based CI Global Asset Management on a joint venture to provide blockchain and Meta ETFs on Toronto’s Stock Exchange.
Galaxy Digital Plans Europe and Asia Expansions
In a statement about the collaboration, Kurz explained that the partnership could bring ether-focused ETFs to Brazil with more diverse strategies. “Galaxy is also keeping an eye on potential In European and Asian countries,” Kurz added.
According to Kurz, the crypto industry exhibits institution-based expansion, such that there is an integral factor for blue-chip companies like Galaxy Digital to work in collaboration with reputable institutions that have an expansive customer registry but lack the in-house expertise requisite for producing and delivering top-tier cryptocurrency products.
The portfolio manager and head of beta strategies and responsible investment at Itaú Asset Management, Renato Eid, explained that the Galaxy Digital-Itaú Asset management coalition would benefit from the asset manager’s stability and legitimacy built across more than six decades. Eid also appreciated the value Galaxy Digital would bring to the alliance, citing industry tuff and expertise given its position as one of the most prolific participants in the global digital asset space.
U.S. Remains Skeptical About BTC ETFs
Although most spot Bitcoin ETFs run on Canadian stock exchanges, the U.S. remains skeptical about authorizing BTC ETFs amid scores of rejected applications.
According to a September announcement by Brazilian digital bank Nubank, its crypto platform has up to 1.8 million subscribers at publication time. Similarly, in June 2021, QR Asset Management launched Latin America’s pioneer BTC ETF in the Brazilian market, setting the pace for others like Hashdex to create crypto-based products in the country.
Noteworthy, it is now barely a week after Galaxy Digital declared a net loss of around $68 million in Q3 on Wednesday, November 2. This dropped from losses of $112 million and $555 million for Q1 and Q2, respectively, according to note that crypto prices are bleeding from the aftermath of FTX’s crisis, with BTC losing almost 24% during the week to trade at current $17,415, according to CoinGecko.
By October 31, Galaxy Digital’s asset management arm managed almost $2 billion worth of assets by leveraging overactive, passive, and venture strategies. The company’s Toronto-listed stock price has plummeted by 36% during the first week of November and 83% year-to-date.