Fidelity Spot Bitcoin ETF Now Under Active Discussions With SEC

Key Points:

• The SEC and Fidelity discussed the Fidelity Spot Bitcoin ETF, focusing on unique “in-kind” creation models.
• Fidelity’s innovative ETF model streamlines creation and redemption without direct cryptocurrency handling.
• Despite a previous SEC rejection, recent engagements with various applicants hint at evolving regulatory discussions.

In a discreet meeting, the U.S. Securities and Exchange Commission (SEC) engaged with Fidelity Investments to delve into the intricacies of the Fidelity Spot Bitcoin ETF application. This clandestine gathering unveiled Fidelity’s approach through a comprehensive presentation on “Bitcoin ETF Workflows,” emphasizing the importance of “in-kind” creation and redemption models.

SEC-Fidelity Meeting Unveils Innovations in Fidelity Spot Bitcoin ETF Application

The meeting centered around a proposed rule change, enabling CboeBZX to list and trade shares of Fidelity’s Wise Origin Bitcoin Trust. The event saw the participation of the SEC’s Division of Corporate Finance, Fidelity members, and CboeBZX representatives.

Fidelity’s ETF model introduces a unique structure involving authorized participants, broker-dealers, issuers, and custodians, streamlining the creation and redemption of ETF shares. This intermediary setup allows market participants to gain price exposure without direct cryptocurrency handling.

The meeting’s implications extend across the crypto landscape, potentially reshaping the fate of Bitcoin ETFs. The company had previously submitted the Fidelity Spot Bitcoin ETF application to the SEC on June 19, following similar submissions by BlackRock and others. Adding to the narrative, Fidelity filed an amended S-1 form with the SEC for the Fidelity Spot Bitcoin ETF on Friday.

Recent developments reveal the SEC’s engagement with various spot Bitcoin ETF applicants, including BlackRock and Grayscale. The industry has been abuzz with speculation on when the first US-spot Bitcoin ETF will receive approval. Hashdex, among the 13 asset managers, anticipates approval by the second quarter of 2024.

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