Fidelity Investments, the Boston-based asset manager, is finalizing its application for a Bitcoin exchange-traded fund (ETF), according to multiple reports on Tuesday. The ETF will track the price of Bitcoin, allowing investors to trade shares representing ownership in the cryptocurrency.
After The Block reported Fidelity’s dramatic expansion of its presence in the digital asset space, Reuters and other sources quickly picked up the news. For many investors, ETFs are enticing as they provide a regulated, convenient way to gain exposure to Bitcoin (BTC) without owning and storing the currency itself. The news provoked a short spike in the Bitcoin price, but the bounce quickly receded.
A Flurry of Bitcoin ETFs
The news comes on the heels of new institutional interest in the crypto industry and similar ETFs. The first leveraged crypto ETF in the US—Volatility Shares’ 2x Bitcoin Strategy ETF (BITX)—started trading on Tuesday. It has already seen around $4.2 million in trading volume since its launch, following approval from the US Securities and Exchange Commission (SEC) last Friday.
Other financial behemoths, such as BlackRock, Invesco, and WisdomTree, have also submitted applications for Bitcoin exchange-traded funds.
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TradFi Is Growing More Confident in Bitcoin
This week, Circle’s CEO, Jeremy Allaire, told Bloomberg he expects Bitcoin ETF applications to gain approval as providers address regulator’s concerns.
“I think progress is being made with more mature market structures that would support something like that,” he said. “You have mature spot markets, well-regulated custody infrastructure, and good market surveillance.”
Bitcoin price since January 1, 2023. Source: CoinMarketCap
“Digital stores of value like Bitcoin remain compelling as a hedge instrument in the context of persistent inflation. There are some macro factors that continue to be supportive there,” Allaire added.
The industry is largely happy about the latest ETF developments. Crypto proponents believe institutional adoption is crucial for the next market surge and attracting more retail investors.
Bitcoin is up approximately 85% since the beginning of the year, according to CoinMarketCap. Its spirited performance has helped assuage fears brought on by the market collapse and high-profile insolvencies of 2022.