According to the official statement in the latest document filed with the SEC, Fidelity’s Bitcoin ETF will be listed on the Cboe BZX Exchange.
Summary
The listing of the ETF on Bitcoin spot on Cboe
One of the Bitcoin spot ETFs for which approval is expected shortly is Fidelity’s.
Chicago Board Options Exchange (Cboe) is the largest US options exchange, and of course, it is based in Chicago, where the Chicago Mercantile Exchange (CME) is also located.
The Cboe has been in existence since 1973, and now offers options on over 2,200 companies, 22 stock indices, and 140 ETFs.
It also offers options on BTC, and once Fidelity’s request is approved, it will also offer a Bitcoin spot ETF.
In December 2017, it was the first exchange in the world to offer the trading of futures contracts on the price of Bitcoin, followed closely by CME a few days later. However, Cboe delisted the BTC futures because there was too little demand, while CME remained.
The CME is indeed specialized in futures, while the Cboe is specialized in options. So, Bitcoin price futures are traded on the CME, while options are traded on the Cboe.
Future and options are similar derivative financial products, but with the difference that option contracts may or may not be redeemed by the expiration date, while futures are always redeemed at expiration.
Fidelity’s Bitcoin ETF request and the listing decision on Cboe
Fidelity has applied for the issuance of its Fidelity Wise Origin Bitcoin Fund at the end of June, shortly after BlackRock’s similar request.
In reality, Fidelity has been present in the crypto markets for a long time, through its subsidiary Fidelity Digital Assets, which has been in existence since 2018. The same parent company, Fidelity, declares that it started showing interest in the blockchain world as far back as 2014.
Fidelity Investments is an American multinational financial services company founded in 1946 and based in Boston. It is the fourth largest mutual fund and pension fund manager in the world.
Therefore, it is a true and real historical giant of the US and global financial markets, so it is reasonable to expect that its Bitcoin spot ETF can have at least a decent success.
The choice of Cboe is curious, but it must be said that Fidelity’s products are generally aimed at their existing customers, not the mass markets.
Bitcoin spot ETFs
There are already ETFs on Bitcoin spot around the world, but in the USA the SEC has always refused to approve them.
There are, for example, in Canada, at the Toronto Stock Exchange which is physically just a few kilometers away from the United States border.
It should also be remembered that there are already ETFs in the USA that replicate the price of Bitcoin, but they are not collateralized in BTC. Instead, they are collateralized with futures contracts on the price of BTC from the CME.
However, futures and ETFs on futures are more products aimed at speculators than investors, while Bitcoin spot ETFs, especially those from Fidelity and BlackRock, seem to be specifically aimed at investors, especially those making long-term investments.
The SEC is expected to approve the launch of Bitcoin spot ETFs in the coming days, so issuing companies and managers are finalizing the last preparations for the launch.
The impact on price
One rather relevant thing is that being collateralized in BTC, these ETFs oblige their managers to buy Bitcoin on the market and immobilize them in cold wallets.
In other words, the more actions they want to put on the market for these ETFs, the more they will be forced to buy and effectively withdraw BTC from the markets.
Bitcoin stored in offline cold wallets are not tradable, so removing BTC from the markets to immobilize them in cold wallets effectively reduces the supply of BTC in the markets.
While it is possible that the issuance of Bitcoin ETFs may reduce the demand for BTC, it should be noted that ETFs target a new audience, namely those who do not already own Bitcoin and have never invested in it before.
Therefore, it is possible that the demand for BTC in the markets does not decrease much due to the launch of ETFs, while in theory it would be possible for the supply to decrease significantly.
There are several estimates regarding this, with some hypothesizing that over the years Bitcoin spot ETFs could attract hundreds of billions of new capital to Bitcoin.
All of this suggests that, if these derivatives are successful, the price of Bitcoin could benefit from it.
However, it is not at all certain that they will have great success, and it will take a while before we can understand it.
