Key Takeaways:
- Fidelity will file for a Bitcoin spot ETF, sources report.
- The SEC has not yet approved such an ETF in the US.
- This is not Fidelity’s first crypto exposure.
YEREVAN (CoinChapter.com) – Asset management giant Fidelity is close to submitting its filing for a spot Bitcoin exchange-traded fund (ETF), the Block reported on June 27, citing a source familiar with the matter.
Why would Fidelity file for Bitcoin spot ETF?
Notably, the rumors about Fidelity’s interest in a Bitcoin spot ETF surfaced parallel with the BlackRock filing, the largest global asset manager with over $9 trillion under its wing.
Exchange-traded funds, or ETFs, attract a broad range of investors seeking exposure to diversified portfolios of assets without enduring the risks. Thus, many fiat financial services companies offer Bitcoin ETFs to their customers. However, those are dealing with futures trading, as opposed to spot trading.
Spot trading carries greater risks, and as of June 2023, there have been no Bitcoin Spot ETFs approved in the United States. The world’s largest digital asset management company Grayscale applied for one in March 2022, getting a rejection.
The US Securities and Exchange Commission (SEC) also rejected financial giant Fidelity’s plea for a Bitcoin Spot ETF in January 2022. However, BlackRock has famously gotten 575 ETFs approved against a single rejection, and the crypto community watches closely.
Fiat interest in Bitcoin grows
However, Bloomberg ETF analyst Eric Balchunas observed a surge in inflows to the ProShares Bitcoin Strategy ETF (BITO). The ProShares ETF was the first Bitcoin-linked ETF in the US and remains popular among investors.
BITO saw weekly inflows of over $65 billion, resulting in the fund’s assets going above $1 billion. Furthermore, Balchunas noted that the Proshares ETF had tracked Bitcoin price action almost “perfectly.”
Also read: Fidelity hogs over 700K MicroStrategy stock (MSTR), increasing its Bitcoin exposure.
Even though it got trashed by some bc futures roll costs, yada yada, it pretty much has tracked Bitcoin perfectly. It’s lagged spot by 1.05% annually, but it’s fee is 0.95% = only 10bps of roll (extra) costs, which is rounding error. Many predicted >5% a yr.
Eric Balchunas noted in a tweet
The company’s crypto exposure continues
Fidelity has doubled down on Bitcoin-related stocks since the start of the year. The corporation is now the third-largest MicroStrategy stock owner, increasing its exposure by over 650% year-to-date. Fidelity now boasts over 700,000 shares worth $293 each, ahead of the June 19 session.
Business intelligence firm MicroStrategy is famously one of the largest Bitcoin holders on the market with 140,000 BTC, approximately 0.7% of the total amount of Bitcoins that will ever be created. Thus, holding MSTR stock and Grayscale simultaneously would ensure Fidelity’s tight grip on the crypto market.
NOTE: The news of Fidelity filing for spot Bitcoin ETF is not yet confirmed or denied.
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