Blockchain & Crypto

Fidelity Applies for Ethereum EFT

Fidelity applied to list and trade shares of the spot Ethereum Exchange-Traded Fund (ETF) on the Cboe BZX Exchange.

fidelity applies for ethereum eft

Asset management firm Fidelity applied with the United States Securities and Exchange Commission (SEC) on November 17 for its own Ethereum exchange-traded fund (ETF).

The application states that US citizens lack low-risk regulated investment vehicles when it comes to ETH exposure. Fidelity claims that existing methods involve counter-party and technical risks as well as legal uncertainty. On the contrary, the firm noted that European investors have access to Ethereum products on regulated exchanges and exposure to a broad range of spot crypto assets.

Fidelity also brought up infamous examples of recent crypto failures such as FTX, Celsius Network, and BlockFi bankruptcies. “If a Spot ETH ETP was available, it is likely that at least a portion of the billions of dollars tied up in those proceedings would still reside in the brokerage accounts of U.S. investors,” says the filing.

The filing came just a week after another significant Ethereum ETF application from BlackRock sent the ETH price to over $2,000. Previously BlackRock applied for spot Bitcoin ETF. Although the decision on the filing is still unannounced, some recent media statements hint at an upcoming positive decision for Bitcoin ETF products.

For instance, ETF specialist with Bloomberg Intelligence, Eric Balchunas revealed on X that SEC’s Trading & Markets advised crypto exchanges to have cash creates for their crypto ETFs instead of in-kind transactions. In simple words, that means that when an ETF needs new shares, it should receive cash equivalent to purchase correspondent digital assets rather than getting a basket of securities or assets that exactly replicate the ETF’s portfolio.

Although the suggestion faced much criticism regarding its implications for the crypto market and viability, for many investors, the alleged negotiations between the SEC and industry players are already a good sign. Most believe that the first crypto spot ETFs in the US may arrive as soon as early 2024.

 

Nina Bobro

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Nina is passionate about financial technologies and environmental issues, reporting on the industry news and the most exciting projects that build their offerings around the intersection of fintech and sustainability.