Fidelity Takes On BlackRock, Readies Its Own Bitcoin ETF Filing

Table of Contents

• Fidelity Preparing Bitcoin ETF Filing As Race Heats Up 
• A Game-Changing Development 
• Will The SEC Change Its Stance? 
• BlackRock’s Filing 

Major asset manager Fidelity is preparing to submit its own application for a spot bitcoin exchange-traded fund (ETF), joining other big money asset managers such as BlackRock. 

BlackRock had recently submitted its own spot bitcoin exchange-traded fund on the 15th of June, sparking considerable interest from other asset managers. 

Fidelity Preparing Bitcoin ETF Filing As Race Heats Up 

With its spot bitcoin exchange-traded fund, Fidelity will join a growing list of institutions that are competing to be the first to introduce and get approval for a spot bitcoin exchange-traded fund. The filing sees Fidelity follow BlackRock, the world’s largest asset manager, in filing for an ETF. According to reports, Fidelity’s application could be filed as soon as this week and would be Fidelity’s second attempt at launching a spot bitcoin ETF. Fidelity also filed an application in 2022 but failed to get approval from the United States Securities and Exchange Commission (SEC). 

Over the past couple of weeks, several asset managers, such as Invesco (IVS.N), WisdomTree (WT.N), Bitwise, VacEck, and the already mentioned BlackRock, have filed applications with the Securities and Exchange Commission for a spot Bitcoin ETF. As a result of the applications, the price of Bitcoin (BTC) has also seen a considerable increase, rising to a one-year high of over $31,000 on the 23rd of June. 

Fidelity is a prominent player in the financial space, with over $11 trillion in assets under management. Additionally, it has been involved with the crypto ecosystem since 2018, operating trading and institutional custody services. It has also offered fund products to its European clientele since February 2022 through Fidelity International.

A Game-Changing Development 

According to market experts, the potential launch of a spot bitcoin exchange-traded fund could be a game-changing development, giving investors exposure to the crypto market without requiring them to acquire or hold the underlying asset. BlackRock’s filing for an ETF has aroused considerable interest in bitcoin ETFs once again, given the firm’s significance, size, and standing. According to senior market analyst at Oanda, Edward Moya, there is considerable optimism in the markets at present. 

“There’s a lot of optimism here that you’re going to get a bitcoin ETF. If that does get done, it could open the door for much more institutional money and probably some high-net-worth retail traders to get back into crypto.”

Will The SEC Change Its Stance? 

The Securities and Exchange Commission has allowed Futures-based bitcoin ETFs since October 2021. These track the price of bitcoin futures contracts. However, when it comes to spot bitcoin ETFs, the Securities and Exchange Commission has rejected several applications. Spot bitcoin ETFs are publicly traded investment vehicles that track the price of Bitcoin, stating that it had concerns that the underlying markets could be manipulated. 

However, many feel that BlackRock applying for a spot bitcoin ETF could be a game changer because the asset manager files for ETFs only when it knows it can get them approved. The filing has also helped to reverse the negative perception of Bitcoin and the larger cryptocurrency markets to some degree. According to Alex Adelman from the crypto rewards fund Lolli, the recent spot ETF filings could act as a vote of confidence for the larger crypto ecosystem. 

“Institutions like BlackRock and Fidelity provide the expertise and custodial services top retailers rely on to serve global consumers.”

The crypto markets have been rattled by a series of adverse events and shutdowns, the most prominent being the collapse of FTX, which authorities alleged was running a multi-billion dollar fraud. More recently, the Securities and Exchange Commission sued Binance and Coinbase, alleging that both violated several rules, an accusation both entities deny. 

The SEC itself has come under legal troubles, with Grayscale Investments suing the regulator over its rejection of Grayscale’s application to convert its flagship Grayscale Bitcoin Trust into an ETF. The case hinges on the fact that the Securities and Exchange Commission having previously approved certain surveillance agreements to prevent fraud in bitcoin futures-based ETFs. Grayscale has argued that the same should apply to its spot fund. 

BlackRock’s Filing 

BlackRock filed its spot bitcoin ETF application on the 15th of June, 2023. According to the filing by the Nasdaq stock exchange with the Securities and Exchange Commission, Coinbase Custody Trust Company will be the custodian of the fund’s Bitcoin holdings, while the Bank of New York Mellon will be the custodian of the fund’s fiat currency. If approved, BlackRock’s ETF will be the first crypto spot ETF in the United States of America.

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.