ETFs will die. And who will kill them are smart contracts and asset tokenization. The statement is by Marcelo Sampaio, CEO of Hashdex, which presents itself as the largest crypto asset manager in Latin America and which has 4 index-linked funds in the segment. But, the executive makes one caveat: until that happens, Exchange Traded Funds will play a key role.
“There is no technological reason why an asset cannot become a token.” And he added: “there is no reason for a company not to have a native token”. But, this will not happen now due to regulatory restrictions. Smart contracts, he added, will unlock the value of anything, as “everything has value”. And that includes, for example, tokenization of actions. Sampaio gave a lecture today (14th) at Ethereum Rio, the first major event for the solution in Brazil that started on the 11th and runs until the 20th.
Sampaio says that this will be an evolution as was the use of electricity, which replaced the use of kerosene, oil and gas, and the sending of emails, which replaced letters by post.
Initiatives such as the sandboxes of the Central Bank and the Securities and Exchange Commission (CVM) can begin to change this scenario. But until a change happens, Hashdex’s CEO says that ETFs will play an important role in attracting investments that are currently in other products. Thus, they will “unlock capital”. In the United States alone, the total market for ETFs of all types is around $7 trillion.
Hashdex to expand international operations in crypto assets
Crypto asset ETFs have had a good acceptance in Brazil. QR Asset, which presents itself as the largest 100% crypto asset manager in Latin America, is the other company that offers these products on B3, where shares are traded. The company has three funds. of crypto index.
The reasons for acceptance include the ease of investing in them, as this is done through banks or brokerages, or without the need for the user to have a digital wallet and do everything alone in a crypto trading company. In addition, they are products under regulation, which gives more confidence to those who prefer less risk. And to top it off, the initial investment can be low.
According to Sampaio, the company is preparing new launches for 2022 and entering more markets, but declined to give details. Currently, he is in Brazil and USA.