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A Fidelity Investments site in New York.
Scott Mlyn | CNBC
Fidelity Investments prepares to launch its own Bitcoin fund as the investment giant strives to strengthen its influence in the digital asset and virtual currency market.
FD Funds Management, a subsidiary of Fidelity, said on Wednesday that it plans to provide financial support to an exchange-traded fund called Wise Origin Bitcoin Trust.
The company has filed Form S-1 with the Securities and Exchange Commission, a preliminary registration statement for the fund.
Fidelity has confirmed that it has filed a prospectus to sponsor a bitcoin ETF, but said it cannot offer further comment due to the preliminary nature of the deposit.
The ETF will track bitcoin’s performance as measured by the movement of the Fidelity Bitcoin Index, a barometer that the investment giant has established to track the price of digital currency.
While the Trust does not intend to sell bitcoin, it will use the cryptocurrency to pay for certain expenses, which under current IRS guidelines will be treated as a sale of that digital currency.
To be sure, Fidelity’s offer to back a bitcoin ETF is far from its first venture in the expanding world of digital currencies.
She created Fidelity Digital Assets in 2018, a subsidiary that has since rolled out its cryptocurrency custody and transaction execution operations. The early approval was enough to attract clients ranging from institutional investors like hedge funds and family offices, according to its executive.
Bitcoin, along with thousands of other digital coins, has seen a surge in buying over the past 12 months as a growing number of investment managers and banks feel comfortable considering it both. as a potential investment opportunity and a medium of exchange.
Although the world’s largest digital asset has struggled in recent weeks, its current price of around $ 52,430 is well above where it was trading below $ 10,000 a year ago, according to Coin Metrics.
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