Asset manager Fidelity is expected to file with the U.S. securities regulator for a spot bitcoin exchange-traded fund, joining other big money managers seeking to launch bitcoin ETFs, the Block reported on Tuesday citing a source familiar with the matter.
In the past two weeks, BlackRock, WisdomTree, Invesco,
VanEck, and Bitwise have filed new applications with the U.S. Securities and
Exchange Commission (SEC) for spot bitcoin ETFs, sending the price of bitcoin
to a more than one-year high of over $31,000 on June 23.
Fidelity declined to comment.
The Boston-based financial firm is also part of a consortium
that includes market makers Citadel Securities and Virtu Financial, retail
broker Charles Schwab, and venture capital firms Paradigm and Sequoia Capital,
which recently launched a crypto exchange called EDX Markets.
"There's a lot of optimism here that you're going to
get a bitcoin ETF," said Edward Moya, senior market analyst at Oanda.
"If that does get done, it could open the door for much
more institutional money and probably some high-net-worth retail traders to get
back into crypto," he said.
Futures-based bitcoin ETFs that track the price of bitcoin
futures contracts have been allowed by regulators since October 2021.
But the SEC has in recent years rejected dozens of
applications for spot bitcoin ETFs, which are a publicly traded investment
vehicles that directly track the price of bitcoin, including one by Fidelity in
January 2022, over concerns that the underlying market could be manipulated.
The game changer for many people this time around was
BlackRock applying for a spot bitcoin ETF, because it files for ETFs only when
it believes it can get them approved, Moya said.
The ETF filing has helped reverse negative sentiment in the
bitcoin and broader cryptocurrency markets, after a series of crypto company
meltdowns, including the sudden collapse late last year of exchange FTX, which
authorities allege was running a multi-billion dollar fraud.
More recently, regulatory scrutiny has weighed on the
sector. This month, Binance and Coinbase Global, two of the biggest crypto
exchanges, were sued by the SEC for allegedly violating its rules, which the
pair deny.
Investors and speculators view the recent spot bitcoin ETF
filings as a vote of confidence for the crypto space, said Alex Adelman, chief
executive of bitcoin rewards company Lolli, especially "since institutions
like BlackRock and Fidelity provide the expertise and custodial services top
retailers rely on to serve global consumers."
Separately, the SEC is itself being sued by Grayscale
Investment over the regulator's rejection of Grayscale's application to convert
its flagship spot Grayscale Bitcoin Trust into an ETF.
That case, which could wrap up by the end of summer, hinges
on the SEC having previously approved certain surveillance agreements to
prevent fraud in bitcoin futures-based ETFs, with Grayscale arguing that the
same setup should apply to its spot fund, since both spot and futures funds
rely on bitcoin's price. © Reuters