U.S. Bitcoin ETF Gets Closer to the Finish Line

  • Fidelity Investments files for a Bitcoin ETF on Wednesday
  • New products at Goldman Sachs (-0.94%) which have mandate for exposure to cryptocurrencies re-confirms growing institutional demand 
Bullishness over the prospect of a U.S. Bitcoin ETF wasn’t able to buoy Bitcoin prices overnight as risk sentiment soured on improving demand for U.S. Treasuries.
 
Even as the U.S. economy shows signs of recovery, there are ongoing concerns over inflation, as well as fresh lockdowns in Europe and parts of the United States.
 
And although Fidelity Investments, the US$4.9 trillion asset manager, filed paperwork with the United States Securities and Exchange Commission, or SEC, to list a new Bitcoin exchange-traded fund on Wednesday, the move, which under normal market conditions would have buoyed Bitcoin prices, wasn’t enough to shift the needle upwards.  
 
Fidelity’s Bitcoin ETF aims to track the cryptocurrency’s daily performance using the Fidelity Bitcoin Index PR, an index that’s derived from several price feeds.
 
If approved, the Fidelity Bitcoin ETF will allow investors access to the fund through a traditional brokerage account without the “potential barriers to entry or risks involved with holding or transferring bitcoin directly.”
 
Like other proposed Bitcoin ETFs, the Fidelity Trust is intended to provide more institutional pathways to cryptocurrencies and if nothing else, should facilitate better price data.
 
So far, lawmakers at the U.S. Securities and Exchange Commission have struck down every proposal to securitize Bitcoin in an ETF over concerns of extreme volatility and price manipulation.
 
Proponents of the flagship cryptocurrency believe the tide could be changing now that Bitcoin has matured as an asset class and more importantly the SEC also has a new boss in the form of Gary Gensler, a crypto-savvy regulator who taught blockchain at MIT’s Sloan School of Management.
 
In growing signs of institutional demand for cryptocurrency exposure, last week, Goldman Sachs filed for a new ETF that includes the option to add BTC exposure.
 
According to the prospectus, the Autocallable Contingent Coupon ETF-Linked Notes “may have exposure to cryptocurrency, such as bitcoin, indirectly through an investment in a grantor trust.”
 
 
 

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