Fidelity, BlackRock Plan New Crypto-Related ETFs

Wall Street is not giving up on ETFs that invest in Bitcoin or crypto-related industries and applications, including blockchain.

Last week, just one day after the Securities and Exchange Commission rejected Fidelity Investments’ application to trade a spot Bitcoin ETF, known as the Wise Origin Bitcoin Trust, Fidelity filed an application for an ETF that invests in companies engaged in cryptocurrency mining, support services and blockchain technology.

It also filed an application for a Metaverse ETF that invests in companies that collect at least half their revenues from investments in computing hardware and components, digital infrastructure, gaming technology and wearable technology.

Both ETFs would invest in proprietary equity indexes and both would be sub-advised by Geode Capital Management.

The SEC’s rejection of the Fidelity spot Bitcoin ETF, like previous agency rejections of spot Bitcoin ETFs, was based on concerns that the ETF’s design could not prevent potential fraud or manipulation and could therefore pose a threat to investors and the public interest. A week earlier the agency rejected SkyBridge Capital’s application to trade a spot Bitcoin ETF.

That was the same week that BlackRock filed an application for an iShares Blockchain and Tech ETF that would invest in companies involved in the “development, innovation, and utilization of blockchain and crypto technologies.” It would be the first crypto-related fund for the giant asset manager.

Although interest in blockchain and crypto is growing among asset managers, Bitcoin, the biggest, most liquid of cryptocurrencies, is trading near $37,000 down 20% year-to-date and more than 40% below its all-time high of $65,000 reached in February 2021.