Fidelity Investments next in line for a spot Bitcoin ETF
US asset managers Fidelity Investments is making a new attempt to launch a spot bitcoin exchange-traded fund (ETF), as revealed in a filing on Thursday.
Fidelity’s fresh proposal comes just two weeks after BlackRock, another major asset manager, filed for its own spot bitcoin ETF, despite facing historical opposition from the Securities and Exchange Commission (SEC).
The agency is yet to approve a bitcoin spot ETF application as it remains concerned about potential fraud and manipulative practices in the cryptocurrency space.
Approval of Fidelity’s proposed ETF, called Wise Origin Bitcoin Trust, would have allowed 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 two weeks.
The world’s fourth-largest fund manager, with assets of $4.2 trillion, has 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.
The SEC has previously rejected or postponed other applications for bitcoin ETFs, but recently gave the greenlight to two bitcoin futures-based ETFs, leading to speculation that it could approve a spot vehicle.
Following BlackRock’s filing, other firms have perceived the move as an indication that the SEC’s stance on bitcoin ETFs may be changing. Consequently, companies like WisdomTree, VanEck, Invesco, and Ark Invest (led by Cathie Wood) have taken initial steps towards launching their own bitcoin ETFs. In fact, Ark Invest recently filed for changes to its proposed bitcoin fund to align it more closely with BlackRock’s application.
Earlier in February, three Democratic senators urged Fidelity to reconsider its retirement product that allows investors to put bitcoin in their 401(k)s, citing the rapid downfall of Sam Bankman-Fried’s crypto empire.
United States senators Elizabeth Warren, Tina Smith and Richard Durbin said in a letter addressed to Fidelity CEO Abigail Johnson that while the full extent of the damage caused by FTX’s collapse continues to unfold, the contagion is being felt across the broader digital asset market. Bitcoin is no exception, they warned.