- Fidelity Investments reinitiates efforts to launch a Bitcoin exchange-traded fund (ETF), following similar moves by BlackRock, Ark Invest, and others.
- The SEC’s primary reservations regarding a Bitcoin spot product revolve around transparency and potential manipulation in the market.
As the Bitcoin ecosystem matures, its allure for traditional financial institutions is hard to deny. Renowned asset management firm, Fidelity Investments, is making its second attempt to introduce a spot Bitcoin exchange-traded fund (ETF), as revealed by a recent filing.
This initiative arrives just a fortnight after BlackRock, another asset management titan, submitted its own filing for a Bitcoin spot ETF. Historically, the U.S. Securities and Exchange Commission (SEC) has been resistant to such a product. However, the recent filings from industry giants indicate a potential shift in the SEC’s stance, sparking a race among asset managers to secure approval.
Casting the net wider, WisdomTree, VanEck, and Invesco have also made preliminary moves towards launching their respective funds. Ark Invest, led by the acclaimed Cathie Wood, revised its proposed Bitcoin fund, aligning it more closely with BlackRock’s application.
The fresh filing from Fidelity Investments seeks approval for the Wise Origin Bitcoin Trust, a previously proposed Bitcoin ETF that met with SEC’s disapproval. This trust has become a topic of similar filings for other firms in the past fortnight.
Notably, the SEC has disapproved of every spot Bitcoin fund application that has come under its consideration. The regulatory body is currently embroiled in a legal wrangle with Grayscale over its decision to halt the transformation of the Grayscale Bitcoin Trust into an ETF. An outcome is expected in this legal contest later this year.
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The concern driving the SEC’s cautious approach towards a spot Bitcoin product hinges on market transparency and the potential for manipulation. To mitigate these concerns, BlackRock’s filing included a proposed surveillance-sharing agreement, a feature replicated in subsequent filings.
Despite its stringent stance on spot ETFs, the SEC has greenlighted the creation of ETFs that track Bitcoin futures contracts. The ProShares Bitcoin Strategy ETF (BITO), boasting more than $1 billion in assets, and the first leveraged Bitcoin futures fund that debuted last Tuesday are testaments to this trend.
Fidelity’s reentry into the race, alongside the other filings, have seemingly buoyed Bitcoin’s market price. The cryptocurrency was trading near $30,500 on the afternoon of the filing, a substantial increase from the sub-$26,000 level prior to BlackRock’s filing.
These unfolding developments underscore the growing acceptance and potential mainstreaming of Bitcoin within traditional finance circles. They paint a picture of a future where Bitcoin and cryptocurrencies become a more commonplace fixture in investment portfolios.
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