Fidelity Seeks SEC’s Nod for Bitcoin ETF

Financial services giant Fidelity applied on Wednesday with the US Securities and Exchange Commission (SEC) to launch a Bitcoin tracking exchange-traded fund (ETF).

Fidelity’s Wise Origin Bitcoin Trust to Hold BTC

Fidelity’s subsidiary FD Funds Management plans to roll out the ETF called Wise Origin Bitcoin Trust, which will hold Bitcoin and value its shares based on the cryptocurrency’s prices on major exchanges, such as Coinbase, Gemini, Kraken, and Bitstamp.

The filing reflects a preliminary application process with the SEC, and Fidelity said it couldn’t provide more details about its planned Bitcoin ETF because of this.

The investment behemoth said in an email seen by Reuters:

“The digital assets ecosystem has grown significantly in recent years, creating an even more robust marketplace for investors and accelerating demand among institutions. An increasingly wide range of investors seeking access to bitcoin has underscored the need for a more diversified set of products offering exposure to digital assets.”

The prospectus discusses all the detail of the ETF. For example, it even addresses the scenario in which Bitcoin is forked. If that is the case, the fund could hold both the original Bitcoin and the forked version.

The goal of the ETF is to help institutional investors get exposure to Bitcoin and implement asset allocation strategies conveniently, without the need to buy the actual cryptocurrency, which can hardly be integrated into a traditional portfolio.

In the case of a long-term bear market, the ETF might not attract sufficient investors, and in this case, it might be terminated or liquidated at the request of Fidelity.

What Does Fidelity’s Move Mean for Bitcoin Market?

If the SEC approves Fidelity’s Bitcoin ETF, the cryptocurrency will make another giant step toward Wall Street adoption. Bitcoin has experienced more adoption from retail investors, driven by the accelerating trend of digitalization amid the pandemic. However, the main boost came from institutional investors, and another major product aimed at Wall Street investors would bode well for the crypto market and specifically Bitcoin.

Fidelity Bitcoin ETF could be available for its large wealth-management and brokerage platforms that manage trillions of dollars in assets.

However, it’s worth mentioning that the SEC had previously rejected several Bitcoin ETF applications.

Fidelity is not the only major investment firm seeking to launch products that expose investors directly or indirectly to Bitcoin.

Earlier this week, banking giant Goldman Sachs has filed an application with the SEC for an investment product tracking the ARK Innovation ETF, which is heavily exposed to Grayscale – which provides the world’s largest Bitcoin fund. In this way, potential investors in Goldman’s product would get exposure to Bitcoin.

Elsewhere, SkyBridge Capital, founded by former Trump administration White House communications director Anthony Scaramucci, also submitted an application to the SEC for a Bitcoin ETF.