Fidelity, a major asset manager, is preparing to submit its own application for a spot bitcoin exchange-traded fund (ETF), following in the footsteps of BlackRock. The filing, expected to be submitted this week, marks Fidelity’s second attempt at launching a spot bitcoin ETF after its unsuccessful application in 2022. The race to introduce and obtain approval for a spot bitcoin ETF has seen several asset managers, including Invesco, WisdomTree, Bitwise, and VacEck, filing applications with the Securities and Exchange Commission (SEC). The anticipation surrounding these applications has contributed to the recent increase in the price of Bitcoin, reaching a one-year high of over $31,000. Fidelity, with over $11 trillion in assets under management, has been involved in the crypto ecosystem since 2018. The potential launch of a spot bitcoin ETF is considered a game-changing development that would provide investors with exposure to the crypto market without requiring them to hold the underlying asset. BlackRock’s filing for a spot bitcoin ETF has generated significant interest and optimism in the market, potentially attracting more institutional and high-net-worth retail traders to crypto. However, the SEC’s previous rejection of spot bitcoin ETF applications due to concerns about market manipulation raises questions about whether the regulator will change its stance. BlackRock’s filing has been seen as significant, as the asset manager typically files for ETFs when it believes it can obtain approval. This move has also helped improve the perception of Bitcoin and the wider cryptocurrency markets. The recent spot ETF filings by BlackRock and other institutions are seen as a vote of confidence for the crypto ecosystem. The crypto markets have faced challenges, including the collapse of FTX and regulatory actions against Binance and Coinbase. The SEC itself has faced legal troubles, with Grayscale Investments suing the regulator over its rejection of its application to convert its flagship Grayscale Bitcoin Trust into an ETF. The case revolves around the SEC’s previous approval of surveillance agreements for bitcoin futures-based ETFs and whether the same should apply to spot funds. BlackRock’s spot bitcoin ETF application, filed on June 15th, 2023, has Coinbase Custody Trust Company as the custodian for the fund’s Bitcoin holdings and the Bank of New York Mellon as the custodian for the fund’s fiat currency. If approved, BlackRock’s ETF will be the first crypto spot ETF in the United States.
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