One of the significant advantages of investing in crypto-assets is the absence of intermediaries, providing users with more autonomy and lower costs. However, this type of investment also requires greater knowledge of the crypto market and, in some cases, exposure to certain risks.
Therefore, two funds (ETFs, an acronym for Exchange Traded Funds) based on cryptocurrencies (HASH11 and QBTC11) have drawn the attention of those who want to enter this universe, but still need a certain security – which is what intermediation does. There is no need to have an account at a crypto exchange and a digital wallet by choosing ETFs, nor to worry about security keys. In addition, this option brings more security in case of eventual problems related to the exchange that does the custody of the currencies.
Thus, there are advantages and disadvantages in each case. To better understand, check out the details about the two funds.
The fund, managed by Hashdex, debuted on B3 on April 22. The exchange, which has had cryptocurrency investment funds for some time in Brazil, is registered with the Brazilian Securities and Exchange Commission (CVM) and has already set up a cryptocurrency fund on the Bermuda Stock Exchange in partnership with Nasdaq.
HASH11 is linked to the Nasdaq Crypto Index, an index created by Nasdaq’s partnership with Hashdex. It offers eight cryptocurrencies in its portfolio (bitcoin, ethereum, litecoin, chainlink, bitcoin cash, stellar, filecoin, and uniswap), and its management fee is 0.3% per year. At the moment, it has been falling, following bitcoin’s downward movement.
QBTC11 debuted on B3 on June 23. Whoever invests will have 100% exposure in bitcoin. It is the second bitcoin ETF globally, after the QBTCC, traded in Canada, and the first in Latin America.
QBTC11’s manager is QR Asset Management, and the fund uses as a reference the index offered by the Chicago Mercantile Exchange (CME), which traditionally positions bitcoin futures contracts. Its administration rate is 0.75% per year, lower than that of HASH11. The big difference between the two funds is that QBTC11 replicates only the value of bitcoin, while HASH11 considers eight cryptocurrencies.
What are the advantages of investing directly in bitcoin?
After learning more about the two funds, it is worth considering investing directly in cryptocurrency, bearing lower fees and greater autonomy in trading.
In addition, it is worth noting that those who invest in bitcoin and buy in dollars end up with an exchange rate risk because the dollar rate may fall. One way around this problem is to use the BRZ, which is pegged to the real, to buy the cryptocurrency.
Another aspect that must be considered is that there is no tax exemption for ETF shares traded at a profit, regardless of the value. On the other hand, bitcoin taxation allows for exemption on profit disposals up to a monthly trading limit of R$ 35.000,00.
Thus, when analyzing the pros and cons, it is clear that the most advantageous option is to invest directly in cryptocurrency, assuming all the risks related to volatility and information management. However, for those who are starting out in the market, funds can offer greater security.