October 18, 2023 at 10:44 GMTModified date: October 18, 2023 at 10:44 GMT
October 18, 2023 at 10:44 GMT

BTC surges as Fidelity amends ETF application

Bitcoin ($BTC) has experienced an increase following the news of Fidelity Investments amending its spot bitcoin ETF filing with the SEC.

BTC surges as Fidelity amends ETF application

Bitcoin ($BTC) experienced a significant increase in value following the news of Fidelity Investments amending its spot bitcoin ETF filing with the US Securities and Exchange Commission (SEC).

The update, filed late Tuesday, detailed how the asset management company plans to secure customer Bitcoin and outlined the various risks involved due to the uncertain regulatory framework surrounding cryptocurrencies.

This surge in Bitcoin’s price comes as the market speculates about the SEC’s potential approval of the first Bitcoin spot ETF, especially after a court overturned the SEC’s earlier decision to deny Grayscale’s fund last month.

Fidelity addresses SEC’s concerns

Fidelity Investments, already managing $37billion across 58 ETFs, has revised its application to the SEC for a spot Bitcoin ETF called ‘Wise Origin Bitcoin Trust’. The company has updated its proposal to address specific issues the SEC had when it initially rejected the application.

If approved, this ETF will allow investors to trade shares that represent the value of Bitcoin without the necessity of owning or securing the digital asset themselves. This method is seen as offering a more secure route for institutional investors to enter the volatile cryptocurrency market.

Abigail Johnson, Fidelity Investments’ CEO, has publicly supported the integration of digital assets into traditional financial markets. Her goal with the ETF is to make investments in assets like Bitcoin more accessible to a broader range of investors.

The revision of the initial ETF application has seen a bullish response from the crypto community. BTC jumped above the $28,700 mark and is currently up 4% in the past seven days.

On social media platform X, Bloomberg Intelligence analyst James Seyffart posted: “More proof that potential spot Bitcoin ETF issuers are in communication with SEC regarding changes/amendments required for SEC to consider approving. Positive signs (in my opinion).”

ETF anticipation

Fidelity’s move is part of a larger trend, as Ark Invest and Invesco also recently made amendments to their Bitcoin ETF proposals. This wave of refiles suggests ongoing discussions with the SEC, contributing to positive sentiment among investors.

Market analysts predict that the approval of a Bitcoin ETF could lead to a substantial increase in the cryptocurrency’s market capitalization, adding as much as $1 trillion.

However, the market is still recovering from recent misinformation regarding the approval of BlackRock’s iShares Spot BTC ETF. The fake news shared by Cointelegraph led to significant market turmoil, resulting in the liquidation of millions of dollars.

SEC faces pressure on ETF stance

Historically, the SEC has been hesitant to approve Bitcoin ETFs, with concerns including market manipulation, investor protection and security of digital assets. Proposals from companies like VanEck and Valkyrie have seen rejections or delays.

However, some argue that Fidelity’s proposal may have a better chance of acceptance. The company’s solid reputation and comprehensive approach to addressing the SEC’s concerns, by enhancing transparency, liquidity, and security protocols, has put it in a favorable position.

The SEC is also dealing with the fallout from the Grayscale decision, which saw the investment company have its ETF rejection overturned.