An unconfirmed report reveals that Fidelity Investments plans to file for Bitcoin ETF and make a deal to buy Grayscale following BlackRock’s move last week.
Fidelity Investments, the renowned asset management giant with an impressive $4.2 trillion in assets, is reportedly ramping up to extend its presence in the digital asset space.
Its efforts will be marked by two potential moves – an acquisition offer for Grayscale, a prominent digital asset management company, and a Bitcoin exchange-traded fund (ETF) in the near future.
Either way, all possibilities will make Bitcoin investment more accessible. Grayscale previously launched Grayscale Bitcoin Trust, an offering that allows individuals to invest in Bitcoin through the stock market.
Bitcoin ETFs in the Spotlight
The news was initially presented on CoinMarketCap before igniting fervent speculation on Twitter.
While this development might appear groundbreaking, it is not Fidelity’s first foray into the crypto domain. The company has been involved in digital assets through its dedicated arm, Fidelity Digital Assets.
Having entered the scene with the launch of its Ethereum (ETH) trading service for institutional clients in late October 2022, Fidelity Digital Assets has established itself as a serious contender in the market.
The potential acquisition, once confirmed, will be a huge deal for the crypto market. Grayscale’s reputation and track record have made it a trusted name within the cryptocurrency community.
Its investment products have provided a regulated and accessible avenue for investors to participate in the cryptocurrency market, particularly during the time when direct investment in cryptocurrencies may present certain challenges or regulatory uncertainties.
Grayscale boasts an impressive portfolio of over $50 billion in assets under management. Its strong market presence makes it an attractive target for Fidelity.
The news of Fidelity’s purported bid for Grayscale is only part of the equation. Concurrently, the whispers reverberating through the industry suggest that Fidelity intends to follow in the footsteps of BlackRock, the largest asset management firm globally.
The company is reportedly seeking approval for a Bitcoin ETF. While the Securities and Exchange Commission (SEC) is yet to respond to BlackRock’s application, it is worth noting that the regulatory body has approved a substantial number of BlackRock’s 575 ETF applications.
This, coupled with the emerging reports of Fidelity’s potential ETF pursuit, has reignited hope and optimism within the cryptocurrency market.
Considering Fidelity’s track record in the crypto landscape, their reported plans to delve into the ETF realm do not appear far-fetched. Fidelity International, an affiliate of Fidelity Investments, successfully listed its Bitcoin exchange-traded product (ETP) on the Deutsche Börse Xetra and the Six Swiss Exchange in 2022.
Moreover, Fidelity’s sales president, in an earlier statement, acknowledged the company’s engagement in Bitcoin mining since 2014, revealing a long-standing commitment to the cryptocurrency.
While the world awaits confirmation and further details from Fidelity regarding their proposed acquisition of Grayscale and the subsequent ETF pursuit, the potential ramifications of these actions loom large.
Will the SEC Give the Green Light?
The process of establishing a Bitcoin ETF involves meeting specific regulatory requirements, including issues related to custody, market manipulation, and investor protection. The SEC has turned down numerous Bitcoin ETF filings over the last few years.
Grayscale’s application to convert its Bitcoin Trust to Bitcoin ETF was also rejected by the authority.
While BlackRock has experienced success with the approval of 575 out of 576 applications for ETH, things are different now. The unique characteristics and regulatory considerations associated with Bitcoin may present a different set of hurdles.
But if BlackRock can make it, Fidelity can follow suit. That means the impact on the crypto market is undoubtedly huge and the growing adoption is inevitable.