In a move that further validates the growing interest in cryptocurrency, asset manager Fidelity is set to file for a spot Bitcoin exchange-traded fund (ETF). Joining the ranks of other major players in the financial industry, Fidelity’s decision underscores the increasing demand for regulated investment vehicles tied to digital assets.
Quick facts:
- Fidelity’s decision to file for a spot Bitcoin ETF joins other major players in the pursuit.
- The surge in spot Bitcoin ETF applications, including Fidelity’s, has contributed to a renewed price surge in Bitcoin, reaching new yearly highs.
- While approval from the SEC remains a crucial hurdle, the growing interest in spot Bitcoin ETFs reflects confidence in the crypto space and the potential for institutional and retail investment.
According to a report from The Block citing an inside source, Fidelity is preparing to submit its application to the U.S. Securities and Exchange Commission (SEC), following recent filings by BlackRock, WisdomTree, Invesco, VanEck, and Bitwise.
The surge in applications for spot Bitcoin ETFs has sparked a renewed surge in the price of Bitcoin, which soared to over $31,000 on June 23. Fidelity, a Boston-based financial firm, has refrained from commenting on the matter.
However, industry experts remain optimistic about the potential approval of a Bitcoin ETF, highlighting the positive impact it could have on institutional and retail investment in the cryptocurrency market.
While futures-based Bitcoin ETFs have been allowed since October 2021, spot Bitcoin ETFs, which directly track the price of BTC, have faced repeated rejections by the SEC. Concerns over market manipulation and lack of regulatory oversight have been the primary reasons for the SEC’s previous denials.
Recent regulatory challenges and legal battles in the cryptocurrency space have underscored the need for clearer guidelines and oversight. Binance and Coinbase Global, two prominent crypto exchanges, are currently facing lawsuits from the SEC over alleged rule violations.
Against this backdrop, the growing interest in spot BTC ETFs is seen as a vote of confidence for the crypto space.
In a related development, the SEC itself is facing legal action from Grayscale Investment over the rejection of its application to convert its flagship spot Grayscale Bitcoin Trust into an ETF.
The outcome of this case, expected by the end of summer, hinges on the argument that the SEC has previously approved surveillance agreements to prevent fraud in Bitcoin futures-based ETFs, and similar standards should apply to spot funds.
Fidelity’s Spot Bitcoin ETF Application Adds to Growing Interest
In April, ARK Investment Management, led by renowned investor Cathie Wood, made a noteworthy revelation that it had submitted a spot Bitcoin ETF application to the SEC well before BlackRock filed its own.
As the pursuit of a BTC ETFs gains momentum with Fidelity’s entry into the race, the industry awaits further updates and regulatory decisions that could shape the future of digital asset investments.
The cryptocurrency market is witnessing a surge of interest from renowned financial institutions including BlackRock, WisdomTree, Invesco, and potentially Fidelity. These Wall Street giants are actively pursuing opportunities in the digital asset space, driven by the need to capitalize on the growing cryptocurrency industry.
However, gaining approval from the Securities and Exchange Commission (SEC) is a crucial hurdle for all these applications. Fidelity had previously faced a setback when its attempt to launch a spot Bitcoin ETF in the United States was rejected in 2021.
Nonetheless, Fidelity found success in introducing the Fidelity Advantage Bitcoin ETF in Toronto, Canada, in December 2021. Since the beginning of this year, the ETF has demonstrated an impressive 75% growth in value.
This move comes as regulators in the United States intensify their scrutiny of unregulated exchanges like Binance and Coinbase, prompting established firms to explore their own avenues within the cryptocurrency ecosystem.
Market Reaction
Bitcoin has made a remarkable comeback, recording a staggering 25% surge in just one week, reaching new yearly highs.
Since the start of the year, it has witnessed substantial growth, with its value soaring by 80%. However, despite this impressive price rally, the network activity associated with Bitcoin hasn’t shown any significant increase in new users or higher transaction volumes.
This recent surge appears to be primarily driven by speculative trading, fueled by a record influx of cash into existing cryptocurrency ETFs.
