Fidelity Investments Seeks Approval for Ethereum (ETH) 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 (ETH) digital currency. This news comes on the heels of a similar app from BlackRock, another major player in the financial services industry.
The proposed Fidelity Ethereum (ETH) Fund will function by tracking the price of Ethereum (ETH), the digital currency associated with the Ethereum (ETH) 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 (ETH) Index, which represents the United States 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 (ETH) ETF, with BlackRock, Grayscale, 21Shares/ARK, VanEck, and Hashdex having filed earlier.
SEC Delays Decision on Bitcoin (BTC) ETFs
The submission of Fidelity’s ETF app comes as the SEC has been under increasing pressure to approve a spot Bitcoin (BTC) ETF after permitting futures-based Bitcoin (BTC) ETFs a year ago. Proponents of digital currency argue that the approval of a spot ETF would create a safer way for mainstream investors to enter the digital asset market.
Nonetheless, the SEC recently announced a delay in its decision on two spot Bitcoin (BTC) ETFs, including one from Franklin Templeton and Worldwide X, after a similar delay involving Hashdex earlier in the week.
Regulatory Hurdles for Ethereum (ETH) ETF
The proposed Ethereum (ETH) ETF will have to navigate regulatory challenges similar to those faced by previous attempts at Bitcoin (BTC) 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 not clear 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 digital currency business since launching institutional digital currency trading and custody services in 2018. This move into ETFs comes after similar filings from rival asset managers like Invesco and Galaxy Digital earlier this year.
Hot Take: Fidelity Investment’s Cryptocurrency Expansion
It’s clear that Fidelity’s move to seek approval for an Ethereum (ETH) ETF marks its continued expansion into the digital currency market. With the growing demand for digital assets and an increasing number of retail investors seeking regulated investment vehicles for digital currencies, the entry of major financial institutions like Fidelity into this space could signal a new era for mainstream digital currency adoption.
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