The link also features the proprietary presentation made by Fidelity to the SEC, requesting approval of Fidelity’s application for a Bitcoin exchange-traded fund (ETF). A screenshot of the memo listing those in attendance can be seen here.
An ETF is a security that follows a certain asset, commodity, industry, or index. The flexibility of an ETF is further enhanced in that it can be traded on a stock exchange the same as any other stock, but it typically provides greater diversity and reduced risk.
The published documents revealed some interesting facts about Fidelity’s thinking and rationale for submitting its ETF application, including the name of the fund “Wise Origin Bitcoin Trust.” According to the following slide, a key driver of the Bitcoin fund was high institutional demand for access to Bitcoin.
From this packed slide, it’s worth noting the reference to in the lower left hand corner, Fidelity’s 2021 Digital Asset Survey, which found:
You’ll note at the bottom of the above slide, the list of crypto exchanges Fidelity intends to use for the Bitcoin price index are Bitstamp, Coinbase (NASDAQ:COIN), Gemini, itBit, and Kraken. Additionally, the Fidelity team used four packed slides to discuss how it would monitor the current Bitcoin Futures instrument, available on the Chicago Mercantile Exchange (CME), as an early detection system against price manipulators of its own proposed ETF.
Our study’s finding that the CME bitcoin futures market leads to bitcoin price discovery across bitcoin futures and spot markets, means that an actor trying to manipulate the ETP would be reasonably likely to have to trade in the CME bitcoin futures market.
Fidelity stressed that since Bitcoin Futures are already traded on the regulated CME, they could leverage that as a first barrier of protection for investors in their own ETF against price fixers. Lastly, Fidelity added two slides in the presentation appendix that listed 11 pending exchange-trade product applications AND five Bitcoin-based mutual funds.
And here are the mutual funds.
This is all useful information for “hodlers” and should reinforce the fact that big institutional investors have big plans for cryptocurrencies.
On The Flipside
Why You Should Care?
Whichever financial institution gets its ETF approved first will have a huge advantage and influence within the crypto-space. It will also unlock the floodgates for mass adoption of cryptocurrency as an easy on-ramp for those not interested in crypto tech, KYC, digital wallets, cold storage, and tracking all their transactions for tax reporting.
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Source: Cryptocurrency - investing.com
