Fidelity updates application for ETF on spot Bitcoin

Yesterday, Fidelity Digital Asset submitted to the SEC an updated version of its application to issue an ETF on spot Bitcoin. 

This is an important move, because it reveals that work is progressing from this point of view. 

The SEC’s interest

For several years now, several parties have been trying to apply to the SEC for approval to issue an ETF on spot Bitcoin in the markets. 

The SEC had always refused to approve them, but the late August ruling in the Grayscale case effectively forced it to approve them. 

What’s more, the SEC could have appealed that ruling, but it decided not to, as if to admit that the court that proved it wrong was right. 

This led to a real turning point. 

In fact, until now the SEC had always limited itself to postponing the decision as much as possible, and eventually to rejecting all requests it received to that effect, without ever elaborating on it, or asking for more information, or even commenting on it. 

Instead, after that ruling it changed its attitude. All of a sudden, in fact, he began to take an interest in these requests, for example, starting to respond with useful comments to improve them so that they would be more suitable for approval. 

Fidelity’s request for the ETF on Bitcoin spot

Fidelity’s request is one of those submitted in June, following BlackRock’s resounding move to do so. 

Everyone knows that BlackRock historically has an approval rate of more than 99 percent for such requests, so as soon as it submitted its request for the issuance of an ETF on spot Bitcoin many believed that it was the right time to submit others as well. 

Not least because the speculation circulating was that the SEC might approve them all at once in order to avoid giving any issuer a time advantage. 

And so after BlackRock’s application was submitted, many more came in record time.

The timelines

There are currently more than fifteen applications, including spot Bitcoin ETFs and spot Ethereum ETFs, for the SEC to rule on. 

Taking only the latest deadlines into consideration, as the agency is continuing to delay approval as long as possible, Fidelity’s is expected to be approved by early March 2024. 

However, the hypothesis that seems most likely is that approval will occur as early as early January, as the maximum time to comment on Ark and 21Shares’ application expires on 10 January 2024. 

If, as is speculated, the SEC is forced to approve this application, it is likely to approve the others as well. So in early January, Fidelity’s could also be approved. 

It is no coincidence that already last week Ark itself submitted an updated version of its application, just as Fidelity did yesterday. 

All those who manage to submit revised versions thanks to the SEC’s comments by January could see their applications approved en bloc in the early days of next year. 

Fidelity and the crypto world: new Bitcoin spot ETF coming soon

Fidelity Digital Asset is the digital asset arm of Fidelity. 

Fidelity began to take an interest in Bitcoin back in 2014, but back then it was just an interest. 

The following year, however, it took its first concrete step, creating a blockchain incubator. 

In 2016 he also began working internally with blockchain-related technologies, and then created his own division dedicated to cryptocurrencies in 2019, calling it Fidelity Digital Asset itself. 

Fidelity Investments is a US multinational financial services company founded in 1946 and headquartered in Boston.

It is one of the world’s largest asset managers, with $4.3 trillion in assets under management. 

It has about 70,000 employees and turns over $24 billion annually. 

It is therefore in effect one of the world’s largest financial giants, specializing mainly in asset management and financial services such as pension funds. 

Its entry into the crypto sector has been very important, and an ETF of its own on Bitcoin spot could give BTC a major boost. 

The impact on prices

While the mere news of the approval of its application might not have a resounding impact on Bitcoin’s price, any success of the ETF could have a significant one. 

The point is that because they are spot Bitcoin ETFs, that is, collateralized directly and entirely in BTC, the more they are purchased the more they require the manager to accumulate and immobilize BTC as collateral. 

So in fact their success would reduce the supply of BTC in the markets, perhaps thus driving up its price. 

The fact that the approval of these spot Bitcoin ETFs occurs in the same year as halving could give even more momentum to the price of BTC. 

According to predictions, their release into the market could lead to hundreds of billions of dollars flowing into Bitcoin over the next three years, the first two of which will be the halving year and the one following halving. 

Historically, between the end of the halving year and the beginning of the next, a new bullrun has always started, always ending at the end of the post-halving year with new all-time highs.