Fidelity Files for Bitcoin ETF

Fidelity Investments, one of the first asset managers to engage with cryptocurrencies, has filed an application with the Securities and Exchange Commission to launch a Bitcoin ETF, joining a growing number of other, though smaller, firms that have done the same.

According to the filing, the Wise Origin Bitcoin Trust would track the performance of Bitcoin as measured by the Fidelity Bitcoin Index PR, which continually updates Bitcoin prices throughout the day based on feeds from multiple spot markets and a volume-weighted median price (“VWMP”) methodology. Fidelity Digital Assets Services, which launched in late 2018, would serve as custodian.

Fidelity has already introduced the Wise Origin Bitcoin Index Fund I, which is available only to qualified investors and requires a minimum $100,000 investment.

In a statement released following its Bitcoin ETF filing Fidelity said: “The digital 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.”

Growing Number of Bitcoin ETF Applications

VanEck, WisdomTree, Skybridge Capital in partnership with First Trust Advisors, Valkyrie Digital Assets and NYDIG Asset Management have all filed for Bitcoin ETFs with the SEC, which had rejected several Bitcoin ETF applications in the past.

Chris Kuiper, vice president of equity research at CFRA, says the Fidelity filing is “big news” given that “Fidelity is one of the largest asset managers around with trillions of dollars in assets under management.

“We think this shows the continuing demand for a bitcoin ETF as well as the continued infrastructure being built around bitcoin products. Fidelity has actually been a leader in the space with their digital assets division so it is not surprising they will be looking to create an ETF.”

Kuiper expects the Fidelity ETF, if approved, will be “a very competitive and low-cost fund” that would help expose many investors to Bitcoin, “including possibly those in 401(k) plans managed by Fidelity.“

In the meantime, three Bitcoin ETFs have been launched on the Toronto Stock Exchange, and in the U.S., the number of Bitcoin and cryptocurrency trusts available to high-net-worth investors, led by Grayscale, is growing.

More Cryptocurrency Trusts & Bitcoin-Linked Cryptocurrency Notes

Grayscale recently announced the addition of five new cryptocurrency trusts available to  accredited investors only, with a minimum investment of $25,000.

In addition, J.P. Morgan and Goldman Sachs have registered with the SEC to sell cryptocurrency-linked notes. The J.P. Morgan Cryptocurrency Exposure Basket pays interest based on the performance of 11 stocks tied to the cryptocurrency ecosystem, including MicroStrategy, PayPal and the CME. The Goldman Sachs note is tied to the performance of the ARK Innovation ETF (ARKK), which invests in Grayscale, and companies such as Tesla and MicroStrategy, which invest in Bitcoin.