Financial giant Fidelity Investments, which manages $4.2 trillion in assets, officially applied to the US Securities and Exchange Commission (SEC) to create a spot bitcoin ETF called Wise Origin Bitcoin Trust. This is the company’s second attempt to gain regulatory approval to launch such a product, after the SEC rejected its first application in early 2022.
Bitcoin ETF is an exchange-traded fund that tracks the real price of bitcoin and allows investors to access crypto through a regulated product without actually owning bitcoin. A spot bitcoin ETF differs from a futures one in that when buying shares of the fund, there is a real purchase of bitcoin on the market, and not a contract for the future delivery of the coin. This can have a positive impact on the price of an asset, as it increases demand and reduces available supply.
Fidelity is not the only company looking to launch a Bitcoin ETF in the US. In recent months, several major players in the financial market have applied to create such funds, including BlackRock, Invesco, WisdomTree and Bitwise. However, the SEC has not yet approved any of them, citing the risks of manipulation and insufficient regulation of the cryptocurrency market.
Some experts believe that Fidelity is more likely to get green light from the SEC than other companies, as it already has experience in cryptocurrencies through its Fidelity Digital Assets division, which provides digital asset custody and trading services for institutional clients. In addition, Fidelity will use its own price index to value bitcoin, based on data from several crypto exchanges.
The SEC has 45 days to issue an initial verdict on the Fidelity application. However, the commission has the option to extend consideration of the application for another 240 days if additional time is needed to study the details of the proposal.
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