Fidelity amends Bitcoin ETF proposal as SEC reportedly offers guidance

abdelaziz Fathi

Boston-based asset manager Fidelity has made revisions to its Bitcoin spot exchange-traded fund (ETF) application, marking a notable step in the ongoing race among mainstream investment giants to introduce a pioneering Bitcoin ETF.

Key highlights from the amendment revolve around the risks tied to the product. This ETF is structured to offer investors a gateway to Bitcoin, without the need for direct ownership, by trading shares on a stock exchange.

The ripple effect of these amendments was evident in the crypto market. Bitcoin’s price surged, peaking at $28,817, a move many attribute to the optimism generated by the renewed push for a spot Bitcoin ETF in the U.S. This surge marks a 2.8% hike in the last 24 hours, setting a two-month record. Moreover, the uptrend pushed Bitcoin’s weekly gain close to 7%.

This revised filing from Fidelity, named the Wise Origin Bitcoin Trust, delves into the strategies to secure customers’ bitcoin in custody accounts. Additionally, it highlights the nuanced risks stemming from the ambiguous regulatory landscape surrounding cryptocurrencies.

Interestingly, Fidelity isn’t alone in its endeavor. Just last week, both Invesco and Ark Invest tweaked their initial ETF filings. This flurry of amendments has ignited speculation, with many experts hinting at a behind-the-scenes dialogue between the SEC and the involved parties. Even though direct confirmations are yet to emerge, these discussions suggest a possible collaborative effort, with the SEC guiding ETF providers to tailor their applications to fit the Commission’s standards.

The financial world is brimming with anticipation for the green light on a spot Bitcoin ETF. A surge to $30,000 was seen after a mistaken report about the SEC’s nod to BlackRock’s Bitcoin ETF surfaced earlier this week. BlackRock CEO, Larry Fink, contextualized the enthusiastic response and resultant price hike as a testament to the intense interest in cryptocurrency, stating that discussions about the necessity for crypto are rampant among clients worldwide.

Approval of Fidelity’s proposed ETF would allow retail and institutional investors to invest in a regulated financial product without requiring them to invest in the crypto directly. The proposed vehicle would track the world’s oldest cryptocurrency through the Fidelity Bitcoin Index, which takes spot prices from various Bitcoin markets.

The recent filing is a proposed rule submitted by the Cboe BZX Exchange to list Fidelity’s previous bitcoin ETF proposal that was rejected by the SEC. Cboe BZX Exchange has made similar filings for other companies within the past six months.

The world’s fourth-largest fund manager, with assets of $4.2 trillion, originally submitted its proposal back in March 2021. Its entry into the crypto market was seen as a further sign of the growing acceptance of digital assets in the traditional investment world.

In 2021, an affiliate of the Boston-based asset manager launched a similar spot bitcoin ETF in Canada. Called ‘Fidelity Advantage Bitcoin ETF (FBTC)’, the fund obtains physical Bitcoin rather than acquiring it through a derivative instrument.

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