By Tom Blitzer
Key Insights:
- Fidelity revives BTC ETF bid, banking on regulatory shift.
- BlackRock’s ETF effort may spur SEC’s approval wave.
- Grayscale’s SEC battle could be a BTC ETF game-changer.
Finance titan Fidelity Investments is steeling itself for a renewed venture into cryptocurrency. Regardless of earlier disappointments, the company is reportedly preparing to reapply for a spot BTC exchange-traded fund (ETF), hot on the heels of the industry giant BlackRock’s similar move.
Fidelity’s Persistent Quest for BTC ETF Success
The US Securities and Exchange Commission dismissed Fidelity’s bold bid for the Wise Origin spot BTC ETF the previous year. The SEC disapproved primarily due to insufficient safeguards against potential market exploitation and deceit. Despite this setback, Fidelity remains undeterred. Insider reports indicate that the company is prepared to table a revamped version of the spot BTC ETF proposal.
Notably, the prominent US firm had already made inroads in Canada’s crypto market in 2021 with a successful launch of the Fidelity Advantage BTC – a spot BTC ETF. As a result, Fidelity has prior experience in steering the complex course of BTC ETFs.
BlackRock’s Foray into Spot BTC ETFs
Remarkably, BlackRock, a notable global asset manager, entered the fray by filing its application for a spot BTC ETF. The iShares BTC Trust ETF application names the crypto trading titan Coinbase as the BTC custodian, and the Bank of New York Mellon holds the reins as the cash custodian.
While BlackRock’s prospects initially were under a cloud, given the SEC’s track record of dismissing all spot BTC ETF submissions, the landscape is transforming. Analysts at Bloomberg have suggested a 50% probability of BlackRock’s approval, throwing light on Grayscale’s ongoing confrontation with the SEC.
Furthermore, Grayscale, a significant stakeholder in the domain, disagreed with the SEC over its spot BTC ETF proposal last year. Paralleling Fidelity, Grayscale faced rejection from the SEC, citing insufficient measures to deter market fraud and manipulation. A victory for Grayscale in this dispute could set the stage for the first spot in BTC ETF in the US.
BlackRock has another arrow in its quiver; its amended filing incorporates a Spot BTC SSA. This bilateral agreement, aimed at strengthening shared surveillance to forestall market fraud, might assuage the SEC’s apprehensions about market manipulation.
In light of these events, Fidelity’s fresh push for a spot in BTC ETF could benefit from BlackRock’s prospective triumph. If the SEC endorses BlackRock’s proposal, it may set a precedent for accepting more such submissions, thus broadening the horizon for entities like Fidelity.
Since the Winklevoss BTC Trust’s unsuccessful endeavour in 2013, the SEC has dismissed proposals from various firms, such as Vaneck, Fidelity, Grayscale, the New York Digital Investment Group, Wilshire Phoenix, and Bitwise. Regardless, the continuous efforts by Fidelity and BlackRock indicate that the aspiration to secure approval for a spot BTC ETF in the US is still alive and kicking.