Fidelity is again seeking to list and trade shares of its Wise Origin Bitcoin Trust spot bitcoin exchange-traded fund. The Boston-based asset manager, which has about $11 trillion under administration and tens of millions of customers, resubmitted its application on Thursday, citing new fraud safeguards. The move comes amid optimism that the Securities and Exchange Commission’s long-held opposition to such funds may be softening.
The latest application cites “significant developments” in the cryptocurrency market, including increased institutional adoption and new liquidity sources. It also notes that Bitcoin’s price volatility has declined significantly since its peak in late December; in addition, the filing says that the fund will be monitored by Cboe Global Markets (CBOE.Z), the exchange that would list its shares, and by an operator of a U.S.-based spot bitcoin trading platform, which isn’t named.
Those additions appear aimed at alleviating some of the SEC’s concerns about spot bitcoin ETFs, including the potential for fraud and manipulation. The regulator previously rejected several similar applications for spot bitcoin ETFs, such as one by Cameron and Tyler Winklevoss in 2021.
As the market for spot ETFs has intensified recently, several big-name asset managers have been applying to launch such products. BlackRock (BLK.N) applied to list a bitcoin ETF this month, and WisdomTree (WT.N) and Invesco (IVZ.N) have signaled they are considering doing the same.
Unlike the ETFs that seek to track futures contracts, which have to meet specific requirements to be approved, these spots ETFs would invest directly in the currency, meaning they can move more quickly and can be traded on major exchanges. However, the Bitcoin market is still relatively small and difficult to navigate for investors unfamiliar with it.
BlackRock’s ETF application was widely credited with pushing the Bitcoin price to a record high this week. The new applications by Fidelity and others could further support that momentum, though the regulatory process will likely be lengthy and complex.
Fidelity’s application would see its regulated custodian, Fidelity Digital Assets Services, provide custody for the trust’s bitcoin holdings. The filing also says that the exchange expects to enter into a surveillance-sharing agreement with an unnamed spot bitcoin trading platform operator. A Fidelity spokesperson wasn’t immediately available to comment on the resubmission. The company filed its original application in March 2021, which was rejected by the SEC in January of last year. Law360 provides the in-depth legal news, analysis, and commentary you need to stay competitive in today’s fast-paced world.
