Itaú Asset Management, the largest private asset manager in Brazil, has launched a dedicated cryptocurrency unit, signaling a major step in the firm's embrace of digital assets. This move builds upon Itaú Asset's existing crypto offerings, including Bitcoin exchange-traded funds (ETFs) and retirement funds with exposure to digital assets. The new division will be led by João Marco Braga da Cunha, formerly a portfolio management director at Hashdex, a Brazilian firm known for launching one of the country's first crypto ETFs.

With over 1 trillion reais ($185 billion) in assets under management, Itaú Asset's move underscores the growing importance of cryptocurrency in the Brazilian investment landscape. The new crypto unit will operate within the firm's mutual funds structure, which currently oversees over 117 billion reais across 15 investment desks.

Itaú Asset's decision to create a dedicated crypto unit reflects the unique opportunities presented by this emerging asset class. João Marco Braga da Cunha noted that the crypto asset segment possesses "unique characteristics for generating alpha". He highlighted the market's relative newness and volatility as key factors creating significant opportunities.

The new division plans to develop a wider array of crypto products, ranging from fixed-income-style instruments to higher-volatility strategies like derivatives and staking-based funds. This expansion aims to cater to a diverse range of investors with varying risk appetites and investment goals.

Itaú's broader push into digital assets includes offering direct trading of ten cryptocurrency pairs, including Bitcoin, Ether, Solana, and USD Coin, through its mobile app. Custody for these assets is handled in-house.

Brazil has emerged as a significant player in the global crypto market. The country ranks 10th worldwide in Chainalysis' "2024 Global Crypto Adoption Index". This growth is supported by a developing regulatory framework. In 2023, Brazil implemented its first comprehensive crypto law, establishing rules for virtual asset service providers and granting the central bank oversight.

Itaú Unibanco, the parent company of Itaú Asset, has been exploring the digital asset space for several years. In 2022, it launched Itaú Digital Assets, a unit focused on tokenization and custody services for digital assets. This unit aims to democratize investments and improve accessibility to investment products. Itaú Digital Assets provides tokenization capabilities and acts as an intermediary for companies seeking to bring their assets to the blockchain.

The creation of a dedicated crypto unit by Brazil's largest asset manager signals growing mainstream acceptance of cryptocurrencies as an asset class. It also highlights the increasing demand from Brazilian investors for access to crypto-related investment products. As the regulatory landscape in Brazil becomes clearer and more supportive, further growth and innovation in the country's crypto market are expected.