Episode 79: Unlocking Crypto for Brazil's US$1.5 Trillion Investment Fund Industry

Brazil Crypto Report

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Episode 79: Unlocking Crypto for Brazil's US$1.5 Trillion Investment Fund Industry

BLP Crypto CIO Alexandre Vasarhelyi discusses how a new regulation from the Brazilian SEC will facilitate flows into crypto

Aaron Stanley

Dec 01, 2023

Transcript

Olá pessoal!

CVM Resolution 175 came into effect in October of this year, bringing several sweeping changes that will impact Brazil’s fund management industry. Among these changes is a provision that reduces the barrier to entry for Brazilian investment funds to allocate into cryptocurrencies and digital assets.

To help us grasp what’s changing and why it’s important, I invited Alexandre Vasarhelyi to the show.

Alexandre is the chief investment officer of BLP Crypto, which is Brazil’s oldest crypto-native investment fund. He has a great understanding of how the Brazilian fund industry operates and argues that managers will eventually have no choice but to allocate into crypto.

Some key themes that we discuss in this interview:

How the new resolution alows funds to directly invest up to 10% of assets into crypto without needing to change bylaws.
Why fund managers recognize the growth opportunities in the crypto asset class and are positioning to capture part of these gains as a strategic play.
How big banks are poised to enable crypto trading/custody tailored to funds’ needs. Large Brazilian banks are likely to begin offering tailored crypto trading and custody services for asset managers within the first half of 2023.
How the CVM has taken a pragmatic approach to providing guidelines for crypto industry players.
Why the success of local crypto ETFs signals strong appetite among investors and points to growing retail and institutional interest in the asset class.
Why fund managers can no longer simply ignore crypto's growth or client demands. Resolution 175 means that managers cannot use regulatory uncertainty as an excuse to dismiss allocating to high-performing crypto assets.

You can connect with Alexandre on Linkedin

Have a great week everyone.

-AWS