BlackRock Launches Ethereum ETF on Brazil's B3 Exchange

BlackRock has launched its Ethereum ETF (ETHA39) on Brazil's B3 stock exchange, allowing Brazilian investors to access Ethereum through Brazilian Depositary Receipts (BDRs). This move further integrates digital assets into Brazil's financial market and reflects the country's growing leadership in cryptocurrency ETFs, surpassing even the United States.

Brazil is rapidly embracing cryptocurrency ETFs, providing institutional investors with easier access to digital assets. The introduction of ETHA39 is a significant step in the global acceptance of cryptocurrencies, positioning Brazil at the forefront of this trend.

The newly launched ETHA39 is an extension of BlackRock’s iShares Ethereum Trust (ETHA) from the US market. It allows Brazilian investors to invest in Ethereum via BDRs on the B3 stock exchange. Each BDR represents a portion of ETHA’s shares, trading between R$40 and R$50 ($7.26 to $9.07). The ETF has a management fee of 0.25%, temporarily reduced to 0.12% for the first $2.5 billion in assets for one year.

BlackRock’s ETHA recently became the first Ethereum ETF to reach $1 billion in net inflows, outperforming competitors like Fidelity’s FETH, Bitwise’s ETHW, and Grayscale’s ETH. ETHA currently holds $860 million in net assets, making it a market leader. Additionally, BlackRock’s Bitcoin fund ranks among the top five ETFs by inflows in 2024, further cementing BlackRock’s dominance in the market.

Alongside Ethereum, BlackRock has also introduced a spot Bitcoin ETF in Brazil, known as IBIT39. Launched in March 2024, IBIT39 serves as the BDR version of BlackRock’s Bitcoin ETF, expanding the company’s digital asset offerings in Brazil. Cristiano Castro, BlackRock’s director in Brazil, noted, “The launch of ETHA39 broadens access to digital assets and simplifies investment in Ethereum, which supports a wide range of blockchain applications.” This statement underscores BlackRock’s commitment to increasing digital asset accessibility in Brazil.

While BlackRock is making strides in Brazil, Ethereum ETFs in the United States face challenges. Despite the success in Brazil, US Ethereum ETFs have experienced $3.45 million in net outflows, highlighting the contrasting market conditions between the two countries. Brazil further solidified its leadership in crypto ETFs with the launch of the first Solana ETF (QSOL11) on the B3 stock exchange in August. This development positions Brazil as a key player in the crypto ETF space, while the US continues to grapple with regulatory challenges.

As reported by BeInCrypto, regulatory hurdles in the US have made it difficult for new crypto ETFs to gain approval. Eric Balchunas, a Bloomberg ETF analyst, commented that the chances of approval are slim unless there’s a change in leadership. He believes that approval is unlikely in 2024 and possibly in 2025, depending on the political environment.

The launch of ETHA39 on Brazil’s B3 stock exchange represents a major advancement, underscoring Brazil’s growing leadership in the crypto ETF space. As BlackRock continues to expand its offerings in Brazil, the contrast with the US market becomes evident, highlighting the challenges crypto ETFs face in the United States due to regulatory issues.