Fidelity Investments, one of the world’s largest asset managers, has resubmitted its application for a spot Bitcoin ETF to the U.S. Securities and Exchange Commission (SEC). The proposed ETF, named Wise Origin Bitcoin Trust, aims to directly track the price of Bitcoin. Fidelity had initially filed for the ETF in 2021 but faced rejection from the SEC in January 2022.
In recent weeks, several other prominent Wall Street firms, including BlackRock, Invesco, WisdomTree, Ark Invest and VanEck, have also submitted applications for Bitcoin spot ETFs. However, the SEC has yet to approve any of these requests.
Gary Gensler, the Chair of the SEC, has expressed his concerns regarding the potential risks associated with spot Bitcoin ETFs. He emphasizes the need for caution and careful consideration before approving such ETFs, ensuring they aren’t exploited for market manipulation or illicit activities.
The timeline for the SEC’s decision on these Bitcoin spot ETF applications remains uncertain. Nevertheless, the increasing interest from Wall Street firms indicates a growing demand for these investment products. If approved, these ETFs could broaden access to the Bitcoin market for a wider range of investors, contributing to the further adoption of the cryptocurrency.
The Fidelity move occurs in the wake of BlackRock’s iShares unit, an asset management company with nearly $9 trillion in assets under management, revealing its plans to launch its own spot bitcoin ETF earlier in June.
BlackRock’s announcement has spurred a chain reaction, reigniting the ambitions of several other fund companies including Invesco, WisdomTree, and Ark Invest.
The relaunched initiative, named the Wise Origin Bitcoin Trust, is not Fidelity’s maiden venture into the spot bitcoin ETF field.
The company had originally applied to launch the same in 2021, only for it to be shot down by the U.S. Securities and Exchange Commission (SEC) in early 2022. Interestingly, Fidelity had successfully rolled out a similar product in Canada just a couple of months before the SEC’s denial.
Unlike its previous attempt, Fidelity’s latest filing comes with a “surveillance sharing agreement” with an undisclosed U.S.-based bitcoin trading platform. This agreement mirrors a similar one included in the recent BlackRock filing and is aimed at assuaging the SEC’s concerns over potential market manipulation.
In addition, Fidelity has brought attention to the recent losses experienced by crypto participants due to the insolvency of several custodians and centralized exchanges. The company posits that a spot bitcoin ETF could serve as a safeguard for “countless investors.”
This series of renewed attempts to launch bitcoin ETFs has flooded the SEC with an influx of new applications. While the SEC has not yet reached a decision on these applications, the market’s optimism is palpable, particularly surrounding BlackRock’s submission.
Despite this, skepticism remains in certain quarters. For example, Townsend Lansing, CoinShares’ chief product officer, recently suggested a mere 10% chance of approval for BlackRock’s application.
Fidelity has been a long-standing player in the cryptocurrency domain, launching Fidelity Digital Assets in 2018 to offer cryptocurrency custody and trade execution services to institutional investors.
The firm further extended its digital footprint by introducing its Crypto Industry and Digital Payments ETF (FDIG) and the Fidelity Metaverse ETF (FMET) in April 2022.
The resurgence of Fidelity’s attempt to launch a spot bitcoin ETF was largely anticipated following BlackRock’s announcement, further intensifying the competition in the digital asset landscape.