Fidelity Investments Seeks Approval for Ethereum ETF
Fidelity Investments, a leading financial services company, has submitted a filing to the Securities and Exchange Commission seeking approval to launch an exchange-traded fund (ETF) that will hold Ethereum cryptocurrency. This news comes on the heels of a similar application from BlackRock, another major player in the financial services industry.
The proposed Fidelity Ethereum Fund will function by tracking the price of Ethereum, the digital currency associated with the Ethereum blockchain network. The ETF shares would be available for trading on the Cboe BZX Exchange under the ticker symbol ETHF.
According to Fidelity, the goal of the ETF is to track the performance of Ether, measured by the Fidelity Ethereum Index, which represents the US dollar price of ether based on trading activity across major ether trading platforms. This makes Fidelity the seventh company to file for a spot Ethereum ETF, with BlackRock, Grayscale, 21Shares/ARK, VanEck, and Hashdex having filed earlier.
SEC Delays Decision on Bitcoin ETFs
The submission of Fidelity’s ETF application comes as the SEC has been under increasing pressure to approve a spot bitcoin ETF after permitting futures-based bitcoin ETFs last year. Proponents of cryptocurrency argue that the approval of a spot ETF would create a safer way for mainstream investors to enter the digital asset market.
However, the SEC recently announced a delay in its decision on two spot Bitcoin ETFs, including one from Franklin Templeton and Global X, after a similar delay involving Hashdex earlier in the week.
Regulatory Hurdles for Ethereum ETF
The proposed Ethereum ETF will have to navigate regulatory challenges similar to those faced by previous attempts at bitcoin ETFs. The SEC typically requires surveillance-sharing agreements between an ETF’s listing exchange and the underlying spot market for an asset, and it is unclear whether the SEC views the ether futures market, launched in 2021, as mature enough to meet that standard.
Fidelity, which oversees over $11 trillion in customer assets, has been expanding its cryptocurrency business since launching institutional cryptocurrency trading and custody services in 2018. This move into ETFs follows similar filings from rival asset managers like Invesco and Galaxy Digital earlier this year.
Hot Take: Fidelity Investment’s Crypto Expansion
It’s clear that Fidelity’s move to seek approval for an Ethereum ETF marks its continued expansion into the cryptocurrency market. With the growing demand for digital assets and an increasing number of retail investors seeking regulated investment vehicles for cryptocurrencies, the entry of major financial institutions like Fidelity into this space could signal a new era for mainstream cryptocurrency adoption.
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