Technology

Fidelity Resubmits Application for Bitcoin ETF, Joining BlackRock and Others in Race for Approval

Boston-based asset management giant Fidelity Investments has once again filed paperwork with the U.S. Securities and Exchange Commission (SEC) for the approval of its Wise Origin Bitcoin Trust, a spot Bitcoin exchange-traded fund (ETF). This move comes in the wake of BlackRock’s recent submission for the iShares Bitcoin Trust, another spot Bitcoin ETF.

Fidelity’s initial attempt to launch the Wise Origin Bitcoin Trust in 2021 was rejected by the SEC in 2022. However, the company remains determined to offer American investors a regulated vehicle for gaining exposure to Bitcoin. In its latest filing, Fidelity emphasizes the need for a spot Bitcoin ETF to protect investors from the risks associated with alternative, riskier investment avenues.

The application includes a “surveillance sharing agreement” between Fidelity and an undisclosed U.S. spot-based Bitcoin trading platform. This agreement aims to address SEC concerns regarding market manipulation and bolster the chances of approval.

Fidelity acknowledges recent losses suffered by cryptocurrency participants due to custodian and centralized exchange insolvencies. The company argues that a spot Bitcoin ETF like the Wise Origin Bitcoin Trust would have safeguarded numerous investors in such situations.

While the SEC has not made decisions on any of the recent ETF applications, market sentiment looks bullish. BlackRock, known for its success in ETF launches, has generally received approval for its previous 575 applications, except for one. However, some experts, like CoinShares’ chief product officer Townsend Lansing, remain skeptical about the chances of approval, citing the SEC’s preference for the majority of Bitcoin trading occurring on a U.S.-based crypto exchange.

The growing interest from investment firms, including Invesco, WisdomTree, Valkyrie, and Bitwise, underscores the high demand for a spot Bitcoin ETF among investors. Such an ETF would provide a more straightforward and regulated avenue for accessing Bitcoin, eliminating concerns surrounding asset custody.

In related news, the SEC recently approved the first leveraged Bitcoin futures ETF, the Volatility Shares 2x Bitcoin Strategy ETF. The launch of this product on the Chicago Board Options BZX Exchange has further fueled investor enthusiasm for cryptocurrency investments.

Fidelity’s involvement in the crypto space dates back several years, and the company has been proactive in offering innovative investment products. Last year, Fidelity announced a product allowing workers to allocate a portion of their retirement funds to Bitcoin. The company also launched two ETFs providing exposure to crypto and metaverse-related companies.

As major players like Fidelity and BlackRock vie for regulatory approval of Bitcoin ETFs, the cryptocurrency market anticipates a potential surge in institutional investment. Bitcoin’s recent price increase, currently trading around $30,539, up 1.27% in the past week, demonstrates the growing interest and potential for further market growth.

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