Fidelity’s Renewed Bid for a Spot Bitcoin ETF

Fidelity, a prominent player in asset management, is taking another shot at launching a spot Bitcoin ETF called the Wise Origin Bitcoin Trust. This comes shortly after a similar filing by BlackRock’s iShares unit, signaling a significant shift in the financial landscape.

CoinDesk reveals that Fidelity’s initial attempt to launch the Wise Origin Bitcoin Trust in 2021 faced rejection from the U.S. Securities and Exchange Commission (SEC), dampening their efforts. However, BlackRock’s recent filing has reignited interest in a spot Bitcoin ETF, with other fund companies like Invesco and WisdomTree also joining the race.

Fidelity’s latest filing includes a “surveillance sharing agreement” with an undisclosed U.S.-based Bitcoin trading platform to address the SEC’s concerns regarding market manipulation. This agreement aims to enhance transparency and security within the trading process, safeguarding against potential manipulative practices.

Furthermore, Fidelity emphasizes the losses suffered by cryptocurrency participants due to custodian insolvencies and centralized exchange failures. The company argues that access to a vehicle like a spot Bitcoin ETF could have protected countless investors from such losses, underlining the urgent need for investor safeguards.

While the SEC’s decision on the new applications is still pending, there is cautious optimism surrounding BlackRock’s filing. However, skepticism remains prevalent. Townsend Lansing, CoinShares’ Chief Product Officer, estimates a 10% chance of approval for BlackRock’s application, suggesting that the SEC may require the majority of Bitcoin trading to occur on a U.S.-based crypto exchange to grant approval.

As the financial industry eagerly awaits the SEC’s decision, Fidelity’s renewed effort and the entrance of BlackRock into the Bitcoin ETF space indicate a significant paradigm shift. Should these filings pave the way for the approval of spot Bitcoin ETFs, it would undoubtedly reshape the investment landscape, opening up new opportunities for investors and further legitimizing the role of cryptocurrencies in traditional finance.