According to recent reports, Fidelity Investments could be going down the Blackrock route and applying for Bitcoin spot ETFs.
First Blackrock, Now FidelityBlackrock’s decision to apply for a Bitcoin spot exchange-traded fund (ETF) seems to have encouraged another leading asset management firm to go down the same route and capitalize on the growing demand for crypto investment products among institutional and retail investors. According to an anonymous source, Fidelity Investments applied the United States Securities and Exchange Commission (SEC) to develop a Bitcoin ETF similar to BlackRock's structure, allowing investors to gain exposure to the digital asset without owning it directly.
The ETF would primarily focus on physically-backed Bitcoin futures contracts, providing a more regulated and accessible investment vehicle for traditional market participants.
Fidelity Also Eyeing Grayscale?Furthermore, if the word on the street is to be believed, the latter is also looking to acquire another asset management giant, Grayscale Investments. The latter currently offers the Grayscale Bitcoin Trust (GBTC), which allows investors to gain exposure to Bitcoin through a traditional security. If the rumors are true and if Fidelity is able to successfully acquire Grayscale, then the former asset management firm will gain access to an already established platform for its Bitcoin ETF. With Grayscale’s parent company, Digital Currency Group (DCG), being in financial hot water for some time, Fidelity’s possible swooping in could salvage the situation.
Fidelity’s Crypto OfferingsThe potential move by Fidelity signifies the increasing acceptance and mainstream adoption of cryptocurrencies by traditional financial institutions. With over $10 trillion in assets under management, Fidelity's entry into the Bitcoin ETF space would bring significant credibility and legitimacy to the cryptocurrency market, potentially attracting a new wave of institutional investors.
The company already offers several crypto products to its investor base. Notably, Fidelity Investments was the pioneer in providing investors with the opportunity to include cryptocurrency assets in their 401(k) retirement accounts. Additionally, in December 2021, the company introduced the Fidelity Advantage Bitcoin ETF in Canada. To top it all, the company opened access to Bitcoin and Ether trading to all its retail traders in March 2023, further expanding its offerings in the cryptocurrency space.
Will The SEC Approve?Bitcoin enthusiasts have long awaited the approval of a Bitcoin ETF, as it could potentially open the floodgates for massive institutional investment, driving the price of the digital currency to new heights. Moreover, the introduction of a regulated Bitcoin ETF could also alleviate some of the concerns around market manipulation and investor protection.
However, it is important to note that the reports about Fidelity's Bitcoin ETF filing and the potential acquisition of Grayscale remain unconfirmed at this time. As with any financial product, the approval process for a Bitcoin ETF involves rigorous scrutiny from regulatory bodies such as the Securities and Exchange Commission (SEC). The timeline for approval and implementation of such a product can be uncertain.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
