Fidelity Investment’s New Venture in Bitcoin ETF

Last Updated on April 29, 2021

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Fidelity Investment, which was previously called Fidelity Management and Research, is an American-based multinational financial services corporation based in Boston. It offers different cryptocurrency services to various hedge funds, regular investors, and trading firms apart from investment institutions. In order to establish its influential presence in the market, Fidelity Investments is currently preparing to delve into its own Bitcoin exchange-traded fund or ETF. This measure will help them to secure their digital assets and virtual currency in the market.

This is not the first time Fidelity Investment has involved itself in expanding its horizon of digital currency. In 2018, the corporation established Fidelity Digital Assets; it is a subsidiary to the main organization and has been working on cryptocurrency custody for its customers and trade execution operations. The trust of the general public in Fidelity Investment was enough to draw institutional investors, family offices, and hedge funds to this endorsement.

FD Funds Management LLC

Another Fidelity Investment subsidiary is FD Funds Management LLC, which wants to back up the financial backing to the ETF through the Wise Origin Bitcoin Trust. Here, it is important to quote that Wise Origin Bitcoin ETF is the biggest entrant to launch Bitcoin exchange-traded products in the United States. Fidelity Digital Assets will act as a custodian and store all holdings related to the Wise Origin Bitcoin.

Being the crypto-focused wing of Fidelity Investment, FD Funds Management LLC seeks to sponsor a Bitcoin ETF. They have filed a Form S-1 with the U.S. Securities and Exchange Commission in this regard. The Form S-1 is a preliminary application filing for the fund. Fidelity could not comment any further on this matter, although they committed to filing a prospectus for the Bitcoin ETF.

The U.S. Securities and Exchange Commission and Cryptocurrency

It is said that if the ETF is approved by the U.S Securities and Exchange Commission, it will also employ the FD Funds Management LLC to track the price index of cryptocurrency. However, there is no say whether the SEC will approve this plan or reject it altogether. It is a fact that despite the growing number of applications they receive, the SEC has never granted permission to any organization in order to create their Bitcoin ETF. According to the regulatory authority, the cryptocurrency market is not ready for this venture as yet.

The FD Funds Management LLC has no plan to sell their investment in the form of Bitcoin, but they sure can use them in exchange for various services. The IRS guidance approves such barter trade and considers it a sort of sale of digital money.

In the past year or so, the digital currency has observed a trend in buying due to the increasing interest and comfort level of banks and investment managers in cryptocurrency. Bitcoin and other digital coins are now considered a safe and secure investment in the open market. The investors see this as an opportunity for a potential investment or a medium of exchange in return for services.

Bottom Line: The Future is Digital

Digital currency is growing day by day, and a new market is evolving for investors. When we compare the statistical data with that of the past, this newly found marketplace is robust and very much in demand amongst the investment organizations. As we speak, according to the Coin Metrics, the current worth of the world’s biggest digital currency is around $52,430, which is much greater than the value it traded for one year ago.