Fidelity Investments Joins the Race for a Bitcoin ETF
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Fidelity Investments, one of the world's largest asset management firms, has filed for a spot bitcoin exchange-traded fund (ETF), following in the footsteps of BlackRock, Ark Invest, and other companies. The move comes just two weeks after BlackRock's filing, which has sparked speculation that the U.S. Securities and Exchange Commission (SEC) might change its stance on bitcoin ETFs.
In recent weeks, several firms have taken steps towards launching their own bitcoin ETFs, encouraged by BlackRock's filing. WisdomTree, VanEck, Invesco, and even Cathie Wood's Ark Invest have made progress in aligning their proposals with BlackRock's application. This trend suggests that market players anticipate a shift in the SEC's position on bitcoin ETFs.
Fidelity's filing, submitted by the Cboe BZX Exchange, aims to list the Wise Origin Bitcoin Trust, the same ETF that was previously denied by the SEC. Over the past two weeks, the exchange has filed similar proposals on behalf of other companies. However, it is worth noting that the SEC has rejected all spot bitcoin fund applications that it has reviewed thus far.
Transparency and market manipulation are among the key concerns of the SEC when it comes to spot bitcoin products. To address these concerns, BlackRock's filing included a proposed surveillance-sharing agreement that could potentially alleviate regulatory worries. Subsequent filings from other companies have also incorporated similar proposals, emphasizing the commitment to maintaining market integrity.
It is important to highlight that the SEC has already allowed the creation of ETFs that track bitcoin futures contracts. The ProShares Bitcoin Strategy ETF, for instance, currently has over $1 billion in assets. Furthermore, the recent surge in interest surrounding bitcoin ETFs has coincided with a rise in bitcoin prices. The digital currency was trading near $30,500 at the time of the Fidelity filing, up from below $26,000 before BlackRock's announcement.
While the prospect of a spot bitcoin ETF is generating excitement in the market, it is crucial to remember that the SEC's decision on Grayscale's application to convert the Grayscale Bitcoin Trust into an ETF is still pending. A ruling on this case is expected later this year and could potentially set a precedent for future spot bitcoin ETFs.
As the race for a bitcoin ETF heats up, market participants eagerly await the SEC's decisions and regulatory developments. The introduction of a spot bitcoin ETF could provide investors with a more accessible and regulated way to gain exposure to cryptocurrencies, potentially attracting a new wave of institutional and retail investors to the market. However, until the SEC addresses its concerns regarding transparency and manipulation, the fate of spot bitcoin ETFs remains uncertain.
Disclaimer: NFA. DYOR.
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