• Fidelity is reportedly filing for a Bitcoin spot ETF in the US.
• This would be a first for the US, as no Bitcoin spot ETFs have been approved by the SEC yet.
• BlackRock has seen success with their own Bitcoin ETFs, and Fidelity is likely trying to capitalize on this trend.
Fidelity Files For Spot Bitcoin Exchange Traded Fund
Asset management giant Fidelity is close to submitting its filing for a spot Bitcoin exchange-traded fund (ETF), according to sources familiar with the matter. The Block reported on June 27th, 2021 that this would be the first of its kind in the US if approved.
Why Would Fidelity File For A Spot Bitcoin ETF?
Exchange-traded funds (ETFs) provide investors with exposure to diversified portfolios of assets without taking on too much risk. In an effort to attract more customers, many fiat financial services companies offer Bitcoin ETFs that involve futures trading rather than spot trading, which carries greater risks. As of June 2023, there have been no successful applications for a Bitcoin Spot ETF in the United States; Grayscale applied in March 2022 but was ultimately rejected by the SEC. Despite this, global asset manager BlackRock has seen success with their own application and now holds 575 approved ETFs against one rejection.
Fiat Interest In Bitcoin Grows
Bloomberg ETF analyst Eric Balchunas observed weekly inflows of over $65 billion into ProShares’ Bitcoin Strategy ETF (BITO). This fund was the first of its kind in the US and remains popular among investors today; BITO’s assets are now above $1 billion after tracking bitcoin price action “perfectly.” Additionally, asset management giant Fidelity has increased their crypto exposure since early 2021 by becoming MicroStrategy’s third largest stock owner — accumulating over 700K shares of MSTR stock despite trashing from some due to extra costs resulting from futures roll .
SEC Approval Still Needed
Though it appears that many large companies are beginning to embrace cryptocurrency investments through various means, approval from the Securities and Exchange Commission will still be necessary before any progress can be made with regards to a potential spot bitcoin ETf from Fidelity. The crypto community awaits further news regarding this development as well as future applications from other firms interested in similar projects.
Conclusion
It remains unclear how regulators will ultimately rule on a potential bitcoin spot exchange traded fund from Fidelity or other financial services firms; however, given recent trends it appears clear that more and more major corporations are beginning to embrace cryptocurrency investments both directly through stocks such as MSTR or indirectly through infrastructure such as an ETf proposed by Fidelity.