- Fidelity’s new filing with the SEC argues for approving a Spot Bitcoin ETF.
- The lack of a regulated product pushes investors to risky platforms, Fidelity argues.
- The filing comes amidst a wave of institutional Bitcoin ETF filings.
Amid the regulatory crackdown on crypto exchanges, major financial institutions are looking to capitalize. Most recently, Fidelity refiled for a Bitcoin ETF, arguing it is a safer, more regulated way to invest in Bitcoin.
With the SEC yet to approve a single Spot Bitcoin ETF, the stakes for Fidelity are high.
Fidelity: No Spot Bitcoin ETF Makes Investors Go to FTX, BlockFi, Voyager
Fidelity’s Friday, June 30 filing argues for a spot Bitcoin exchange-traded product (ETP), a regulated investment vehicle that would provide exposure to Bitcoin.
The company cites the collapse of platforms like FTX and Celsius as examples of the risks that current investment options pose to investors. Moreover, Fidelity claims that regulated alternatives like futures Bitcoin ETFs have substantial fees that put investors off.
“To this point, the lack of a Spot Bitcoin ETP exposes U.S. investor assets to significant risk,” Fidelity argues. This is because investors seeking exposure to Bitcoin are forced into riskier alternatives. This includes unregulated platforms such as the collapsed FTX and Celisus Network.
“For instance, many U.S. investors that held their digital assets in accounts at FTX, Celsius Network LLC, BlockFi Inc., and Voyager Digital Holdings, Inc. have become unsecured creditors in the insolvencies of those entities,” Fidelity argues.
Fidelity adds that a Bitcoin ETF would provide a safer alternative to investing with unregulated centralized crypto entities. This would protect investors from losses that can occur when platforms fail.
The investment firm also points to other countries, including Canada and Brazil, which enable spot ETFs. These countries also allow funds that hold physical Bitcoin, Fidelity points out, adding, the situation is similar in Switzerland and across Europe.
Fidelity Joins Flurry of Bitcoin ETF Filings
Fidelity’s filing comes amidst a wave of institutional interest in cryptocurrencies. According to a recent Bloomberg report, 12 active Bitcoin ETF filings are in the pipeline.
On June 15, the largest asset manager, BlackRock, filed for a spot in Bitcoin ETF. Other firms soon joined in. Just like Fidelity, Invesco, and WisdomTree also refiled for Bitcoin ETFs after initial rejections by the SEC. This demonstrates that major financial institutions are eager to capitalize on growing retail interest in crypto.
On the Flipside
- Despite criticism over its price, ProShares Futures Bitcoin ETF has closely tracked the price of Bitcoin.
- While a spot Bitcoin ETF could provide a safer alternative to platforms like FTX and Celsius, it still exposes investors to Bitcoin’s inherent volatility.
Why This Matters
The approval of a Bitcoin ETF could have significant implications for the crypto market and investors. For one, it could increase liquidity in the Bitcoin market, making it easier for investors to buy and sell Bitcoin.
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