According to a source, Fidelity will register with the U.S. securities regulator for a spot bitcoin exchange-traded fund.
BlackRock(BLK.N), WisdomTree(WT.N), Invesco(IVZ.N), VanEck, and Bitwise have submitted new SEC spot bitcoin ETF applications in the previous two weeks, pushing bitcoin to a more than one-year high of almost $31,000 on June 23.
The Boston-based financial institution, along with market makers Citadel Securities and Virtu Financial (VIRT.O), retail broker Charles Schwab (SCHW.N), and venture capital firms Paradigm and Sequoia Capital, created EDX Markets, a crypto exchange.
“There’s a lot of optimism here that you’re going to get a bitcoin ETF,” said Oanda senior market analyst Edward Moya.
“If that does get done, it could open the door for much more institutional money and probably some high-net-worth retail traders to get back into crypto,” he said.
Since October 2021, regulators have authorized bitcoin ETFs that track futures contracts.
The SEC has rejected dozens of spot bitcoin ETF applications, including one by Fidelity in January 2022, due to fears that the market could be manipulated.
BlackRock applying for a spot in Bitcoin ETF was a game changer for many this time since it only files for ETFs when it believes it can get them approved, Moya said.
After a succession of crypto business meltdowns, notably the abrupt collapse late last year of exchange FTX, which authorities believe was running a multi-billion dollar fraud, the ETF registration has helped turn negative mood in the bitcoin and cryptocurrency markets.
Regulatory scrutiny has hit the sector recently. The SEC sued Binance and Coinbase Global (COIN.O), two of the largest crypto exchanges, this month for violating its rules, which they deny.
Alex Adelman, CEO of bitcoin rewards company Lolli, said investors and speculators view the spot bitcoin ETF filings as a vote of confidence for the crypto space, especially “since institutions like BlackRock and Fidelity provide the expertise and custodial services top retailers rely on to serve global consumers.”
Grayscale Investment is also suing the SEC over denying Grayscale Bitcoin Trust (GBTC.PK)’s ETF application.
Since both spot and futures funds depend on bitcoin’s price, Grayscale argues that the SEC’s surveillance agreements for futures-based ETFs should apply to its spot fund, which could be resolved by summer.
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