Bitcoin ETFs are getting really popular as the adoption of the currency increases. And even though the US is yet to approve one, other countries are very open to the idea. We already have a Bitcoin ETF in Canada, and now Latin America’s 1st ETF has also been launched. It has gone live on the Brazillian Stock exchange with a ticker name of “QBTC11”. The ETF was first approved by the Brazilian SEC in March to trade on the B3 exchange.
What is a Bitcoin ETF?
A Bitcoin ETF or an exchange-traded fund is a method to track the value of Bitcoin. They work on traditional market exchanges but give similar returns to cryptocurrencies. Many investors who think getting into crypto is a good idea but don’t want to use crypto exchanges can go for an ETF. Buying shares of an ETF is like buying parts of BTC, and the prices fluctuate depending on the asset it’s based on.
ETFs also provide a lot of benefits. For example, the ease with which you can invest in an ETF is higher than crypto directly. It is also much easier to hold an ETF for a longer time than the crypto itself due to the risk of losing a password. ETFs also help in diversification as they can have multiple assets for better risk management and returns. And finally they are approved by the SEC and hence follow the tax laws and are much efficient than crypto tax regimes.
Why are ETFs important?
Gold is now considered as the safe haven for investors, but it was once like Bitcoin. It was banned in 1934 and didn’t have any ETFs. But in 2004, when the first Gold ETF was approved in the US, the prices increased phenomenally in the next decade. For tech enthusiasts and crypto investors, using a crypto exchange to buy Bitcoin seems normal, but it might be too difficult for a normal person. So, an ETF brings the asset to the masses, and since the government approves it, one can invest in it without any concern. So, a Bitcoin ETF is of utmost importance for the future of cryptocurrencies.
What are your thoughts on the approval of Latin America’s 1st Bitcoin ETF? And do you think it will drive Bitcoin adoption in the country? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.