Bermuda Stock Exchange (BSX) Approves Crypto ETF
The Bermuda Stock Exchange (BSX) has approved a cryptocurrency ETF. The ‘Hashdex Nasdaq Crypto ETF’ will be traded on Bermuda’s BSX, handing institutional investors access to Bitcoin and other cryptocurrencies.
The ETF is a joint venture with Brazilian-based fund manager Hashdex and US exchange Nasdaq.
Bermuda is the first jurisdiction to pass a cryptocurrency ETF, which many in the space have been eagerly waiting for.
Many US companies have submitted Bitcoin ETF proposals in the past, but have constantly hit a brick wall when dealing with the Securities and Exchange Commission (SEC).
What is a Crypto ETF?
An exchange-traded fund (ETF) is an investment fund that can be easily traded on the stock market.
The Hashdex Nasdaq Crypto ETF will track a portfolio of cryptocurrencies and blockchain-based assets that are tracked by the Nasdaq Crypto Index.
It will give investors access to speculating on the cryptocurrencies without having to buy them.
And although investors won’t technically be buying cryptocurrencies, it will open up the crypto space to those who already use traditional brokerage companies.
The access and familiarity of this will no doubt encourage more investors to speculate on crypto, instead of being put off by the lack of regulations and having to control their own private keys.
According to the BSX announcement, around three million Class E shares will be available to trade on the Hashdex Nasdaq Crypto Index at $1,000 per share.
It’s not yet clear which cryptocurrencies will be represented, but it’s expected that Bitcoin will make up the majority of the basket along with a few other large cap cryptocurrencies, such as Ethereum, Ripple and Litecoin.
Bermuda Leading The Way For Crypto Adoption
Bermuda might be a small jurisdiction and economy, but the Caribbean island-nation is leading the charge when it comes to crypto adoption.
With the announcement of the world’s first cryptocurrency ETF, Bermuda has shown the rest of the world that it isn’t waiting for the bigger markets to lead.
While the BSX is smaller than Nasdaq or London Stock Exchange, its market cap is around $300 million, and with global access this could help it to grow.
Back in 2017, the Bermuda government launched a blockchain task force in conjunction with the Bermuda Business Development Agency (BDA).
Back then it passed legislation on initial coin offerings (ICOs) and created a regulatory sandbox for cryptocurrency companies, which led to cryptocurrency company Circle moving its exchange operations there.
Then last year, the government began developing a blockchain-based digital ID system and announced the public could pay their taxes with USDC stablecoin.
Earlier this month, the Bermuda government announced it was testing a stablecoin. The Bermudian Dollar Token (BMDT) is being created with Bermuda-based crypto startup Stablehouse, with an aim of quickly distributing funds to residents.
Bermuda Setting The Crypto Standard
While the US SEC knocks back one ETF proposal after another, Bermuda isn’t holding back.
Bermuda might be a small idyllic nation more known for its laid back attitude, but the regulators there see the potential in leading the cryptocurrency charge and are looking to attract investors and innovation.
The ETF will attract money from investors around the world, and will benefit Bermuda and the crypto space at large.
Not only that: Nasdaq is involved in the ETF and its lobbyists will no doubt begin to pressure the SEC, so if this is a success it will likely plough more pressure on the SEC.
Author: Pablo Clarke