By Shelly Melancon (Switzerland)
A new ETF is set to be traded on one of the biggest stock exchanges in the world starting this week. The ETF is special; a bitcoin-based spot ETF. The ETF is owned by Fidelity Investments and will be listed under the name Fidelity Advantage Bitcoin. This will become the first bitcoin spot ETF to be listed in Northern America.
The announcement was made on Twitter yesterday by Eric Balchunas, a Bloomberg analyst primarily focused on ETFs. According to Balchunas, the listing of Fidelity’s bitcoin spot ETF came as a surprise but he noted that the event will help Fidelity to easily become the biggest investment management company as its asset under management (AUM) grows.
Fidelity is among the biggest asset management companies with offices in different countries around the world. As of writing, the company has over $4.9 trillion assets that it manages. Fidelity has now added more options for investors with a bitcoin spot ETF. The choice of the Canadian Stock Exchange is one that is logical given the US SEC’s position on crypto spot ETF.
No Bitcoin Spot ETFs in The US
Last month, the SEC rejected a bitcoin spot ETF application from Van Eck. In its statement, the apex regulatory agency said that the spot ETF was too risky given bitcoin’s volatility. This led to other companies withdrawing or halting applications for their bitcoin ETFs. Canada’s approval of the bitcoin spot ETF is going to send a message to the US SEC.
The bitcoin ETF will be listed under the ticker FBTC CN. It will become the first crypto product to be granted approval for offering spot derivatives on a stock exchange in Canada. Other bitcoin-based ETF products are live on the stock exchange but the new spot ETF will have an advantage over them by offering live price tracking.
The product is touted to be welcome by investors who want more exposure to crypto assets, especially bitcoin. The investors have, in recent times, called for more products that will give them better investment options instead of being limited to futures ETFs and ETPs.
The investors will also have some measure of protection from the high roll costs of live price tracking. This will improve their confidence as they seek to explore the new product and make some gains. But the journey and outcome will have far-reaching impacts not only in Canada but in its neighbor, the US.
All Eyes on the Bitcoin Spot ETF
The SEC is sure to keep a watchful eye on the progress and outcome of the soon-to-be-listed bitcoin spot ETF. Having expressed its reserve against a similar proposal, the SEC will want to see how it plays out in Canada before making a final decision regarding the pending applications.
Earlier, Grayscale, another crypto investment management firm, wrote to the SEC’s secretary to object to the rejection of Van Eck’s proposal. In the letter, Grayscale noted that the SEC was treating bitcoin spot-ETFs like a different class of asset instead of its official designation as a derivative. The SEC has not responded as of press time.
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