There are rumours circulating this morning that Fidelity Investments, the world’s third largest fund manager, could be about to apply for a Bitcoin ETF and acquire Grayscale.
Fidelity Investments is renowned for offering broader financial services including mutual funds and index funds while Grayscale is a digital asset manager that provides a way for investors to gain indirect exposure to cryptocurrencies. An acquisition of Grayscale will further lend credibility to emanating reports as it will provide the required digital infrastructure required for a Bitcoin ETF.
The news is hardly surprising as the world’s top asset managers continue to work towards expanding their array of services to allow retail investors exposure to Bitcoin. Their push for a Bitcoin ETF signifies high investor demand for exposure to Bitcoin through a regulated investment product and an ETF would provide a convenient and accessible way for investors to do so without having to directly own and store the cryptocurrency themselves. Currently, about seven futures Bitcoin ETF have been approved by the SEC but no spot Bitcoin ETF has received approval yet.
Fidelity Investments’ activity in the space dates back to November 2021 when it first launched the Fidelity Advantage Bitcoin ETF (FBTG). The ETF currently has $58.3 million in net assets.
In March this year, Fidelity Investments took a significant step by expanding its crypto trading services, originally limited to institutional investors, to include retail traders as well.
BlackRock Bitcoin ETF
The world’s largest asset management company, BlackRock, last week filed for a spot Bitcoin ETF. It will become the first of its kind, if approved.
The prospectus summary of the filing submitted to SEC reads: “The purpose of the Trust is to own bitcoin transferred to the Trust in exchange for Shares issued by the Trust. Each Share represents a fractional undivided beneficial interest in the net assets of the Trust. The assets of the Trust consist primarily of bitcoin held by the Bitcoin Custodian on behalf of the Trust.”
Many are optimistic about BlackRock’s chances despite the SEC outrightly rejecting all applications for a Bitcoin spot ETF till date. One of the reasons for this is BlackRock’s high success rate of filed applications. About 575 applications for an ETF have been approved by the SEC while only one has been rejected. Another reason for the widespread optimism is the idea that CEO Larry Fink’s political influence could play a major role in swinging the tides in their favour.