Fidelity Announces Plans to Release Bitcoin ETF

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Fidelity Announces Plans to Release Bitcoin ETF
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Fidelity Release Bitcoin RTF

Last week, Fidelity Investments announced their plans to release their own exchange-traded fund, tracking the price of Bitcoin. This unveiling only furthers Fidelity’s push to place cryptocurrencies at the center of mainstream finance. Serving as the fund’s custodian, Fidelity Digital Assets will store the ETF’s holdings. According to Fidelity’s security filing, Wise Origin Bitcoin Trust aims to match an index that pulls spot prices from various cryptocurrency markets, such as popular exchanges and beyond. 

Wise Origin Bitcoin Trust requires the approval of the Securities and Exchange Commission before moving forward into new territory. If the firm’s ambitions are approved, Fidelity’s ETF will be poised for purchasing on platforms that currently oversee trillions of individual investors’ assets, such as wealth-management and large brokerage platforms. 

Fidelity Investment Accounts: There’s a New Sheriff in Town

While the industry has remained hopeful for a breakthrough, countless applications for bitcoin ETFs have been rejected repeatedly by the SEC. This has sufficiently blocked investors attempting to buy into the market by utilizing financial vehicles with low fees and tax advantages. Although these improvements have only slightly influenced the way stock and bond funds are sold, slow and steady wins the race. 

Abigail Johnson, the chief executive over at Fidelity, has been a long-term champion of the potential of cryptocurrencies as a whole. In terms of major financial firms backing Bitcoin, Fidelity was among the first. This shift served as a critical milestone in a market Wall Street was reluctant to embrace. With the surge of prices of Bitcoin, though, the resistance is beginning to fade, and there is less worry over risk and stability – which has drawn the interest of investors of all sizes.

In a statement, a spokeswoman for Fidelity noted “The digital assets ecosystem has grown significantly in recent years, creating a more robust marketplace for investors and accelerating demand among institutions”.

Understanding How Earnings from Cryptocurrency are Taxed

Over the last decade, Fidelity has experimented with the use of digital ledgers to execute trades, as well as the mining of digital coins. By putting their own money at risk, Fidelity created a cryptocurrency fund in order to enable clients to donate digital assets to a variety of charities. By 2018, Fidelity put plans in motion to store and trade Bitcoin for professional investors, and hedge funds. Currently, they serve as a custodian to over 100 institutions. A few months back in September, Fidelity even began to offer specific qualified investors the opportunity to utilize a private bitcoin investment fund.

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Fidelity Jumps Into the Future

Although other financial firms have tossed around the idea of bringing cryptocurrencies into the fold, Fidelity has made concrete steps to make it a reality. Bank of New York Mellon Corporation said it will issue, transfer, and hold Bitcoin on behalf of asset-management clients, in a statement last month. This announcement follows the efforts of Northern Trust Corp, another major custody bank. Their notion is to form a joint venture alongside Standard Chartered PLC, in order to store digital assets on behalf of their clients.

The market has experienced a plethora of setbacks including the multitude of rejected applications over the years. More notably, back in 2018, the SEC rejected 9 individual Bitcoin ETF applications alone. As long as the SEC continues to reject application after application, money managers will have no other choice but to try and try, again.

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