On Thursday, Fidelity followed BlackRock and jumped back into the rejuvenated race to launch the first spot Bitcoin ETF in the U.S. The financial services firm filed again for the Wise Origin Bitcoin Trust. Early last year, the SEC rejected the investment manager’s previous filing.
“Fidelity has been increasing their ETF presence and has shown strong conviction in educating investors about how cryptocurrency can impact a broader portfolio. They also have broad distribution which will help if they get the green light to launch,” said VettaFi Director of Research Todd Rosenbluth.
Surveillance-Sharing Agreements
The recent filings for spot bitcoin ETFs by both BlackRock and Fidelity feature surveillance-sharing agreements. And CoinDesk reported yesterday that ARK had updated its spot bitcoin ETF filing to include a reference to a surveillance-sharing agreement.
The SEC has repeatedly expressed concerns that bitcoin markets could be subject to manipulation. The would-be spot Bitcoin ETF issuers likely see surveillance-sharing agreements as a way to allay such worries. The added feature would increase the transparency around their proposed products.
“The SEC has been consistently clear with their concerns about fraud and manipulation. I’m not sure the surveillance-sharing agreements will be enough to sway them that it is safe to approve a spot Bitcoin ETF. Just because more firms want to offer them does not mean the regulatory challenges have been made. Asset managers have the burden of proof,” Rosenbluth added.
The First-Mover Advantage
The first firm to secure the SEC’s approval for its proposed spot Bitcoin ETF will see an undeniable first-mover advantage. One has only to look at the battle to be first to market with a bitcoin futures ETF. The ProShares Bitcoin Strategy ETF (BITO ) was the first of those products to debut in October 2021, and it quickly gathered $1 billion in assets under management. Meanwhile, competing products launched in its wake have struggled to attract investor dollars by comparison.
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