Fidelity Digital Assets – the $4.5 trillion asset manager’s crypto-arm – has resubmitted its filing to launch a Bitcoin Spot ETF in the United States.
Parts of the filing are virtually identical to BlackRock and ARK Invest’s respective submissions earlier this month.
Fidelity Tries Again
According to a 19-b4 filing with the U.S. Securities and Exchange Commission (SEC) on Thursday, the proposal would allow the Cboe BZX Exchange to list and trade shares of Fidelity’s Wise Origin Bitcoin Trust.
Much like ARK on Wednesday, Fidelity began by rebutting the Commission’s justification for denying previous spot ETF applications, such as its own. The SEC’s main argument is that the applicants thus far have failed to form a surveillance sharing agreement (SSA) with a regulated market of significant size – and that CME Bitcoin Futures don’t count.
“In every prior approval order for Commodity-BasedTrust Shares, there has been a derivatives market that represents the regulated market of significant size, generally a Commodity Futures Trading Commission (the “CFTC”) regulated futures market,” read the filing.
Nevertheless, the filing is taking cues from both BlackRock and ARK before it, with Cboe proposing to enter an SSA with “an operator of a United States-based spot trading platform for Bitcoin,” that represents a “substantial portion of US-based Bitcoin trading.”
James Seyffart – an ETF Research Analyst with Bloomberg Intelligence – published an unofficial estimate of the SEC’s next deadline to approve this ETF, predicting September 2 as the date. ARK, meanwhile, he slates for August 13 – ahead of BlackRock on August 19.
Updated. Was moving too fast before. pic.twitter.com/WWFIK87xgK
— James Seyffart (@JSeyff) June 29, 2023
The Risk of No ETF
In its filing, Fidelity added that failing to approve a spot Bitcoin ETF is exposing investors to more investment risk – not less.
“The lack of a Spot Bitcoin ETP exposes U.S. investor assets to significant risk because investors that would otherwise seek crypto-asset exposure through a Spot Bitcoin ETP are forced to find alternative exposure through generally riskier means,” argued Fidelity.
The firm cited FTX, Celsius, BlockFi, and Voyager as examples of such “alternative means” of exposure – all crypto firms that went bankrupt and froze client assets last year from a combination of market turmoil and active mismanagement/fraud.
Fidelity plans to act as the custodian for the fund’s Bitcoin, unlike BlackRock, which plans to outsource that task to Coinbase.
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