Fidelity is one of the American companies that has issued ETFs on Bitcoin spot on US exchanges. Yesterday, two interesting and positive news came out regarding Fidelity and Bitcoin.
It is even possible that this news may have played some kind of role in yesterday’s small price recovery, which returned for the first time above $44,000 after the sell the news following the launch of the new ETF on the market.
Summary
The latest news on Fidelity’s Bitcoin ETF
FBTC, which stands for Fidelity Wise Origin Bitcoin Fund ETF, was launched on the New York Stock Exchange (NYSE) on January 11th.
In less than a month, it has accumulated over 63,000 BTC, becoming the third ETF in the world in terms of BTC holdings, behind BlackRock’s (IBIT) and obviously Grayscale’s (GBTC) ETFs.
Actually, in less than a month GBTC has liquidated about 150,000 BTC, and FBTC and IBIT alone have absorbed almost 140,000. So, these two new ETFs alone have managed to absorb almost all of the Bitcoins liquidated by Grayscale.
Furthermore, two other new Bitcoin ETFs, ARKB by Ark Invest and BITB by Bitwise, have absorbed another 31,000 BTC, so the Bitcoins purchased by the new ETFs overall have been more than those sold by Grayscale.
The Grayscale ETF also landed on the stock exchange on January 11th, but it had already existed since 2013 as a non-tradable fund on the stock exchange.
Therefore, FBTC by Fidelity and IBIT by BlackRock are the two new most successful Bitcoin ETFs, and since the largest of the existing ones (BTCC by Purpose) now only has 31,000 BTC, it can be said that theirs has been a great immediate success.
Fidelity’s optimistic forecasts
The first of the two positive news regarding Bitcoin coming from Fidelity is that the division dealing with digital assets, Fidelity Digital Asset (FDA), yesterday expressed a positive view on BTC, both in the short, medium, and long term.
FDA claims that both in a time horizon of less than 1 year, in 5 years, and for longer time horizons, the forecasts on Bitcoin are positive.
However, it must be said that crypto markets have different timing.
Or on the crypto markets, the short term is made up of weeks (and the very short term of days), while the medium term is made up of months. Instead, for Fidelity, the short term is months, and the medium term is years.
In addition, if for Fidelity the luster (5 years) is a long period, for the crypto markets it is still considered a very long period, since the long term is constituted by the four-year cycle dictated by Bitcoin’s halvings.
So while Fidelity is still using the traditional timing used in traditional markets, crypto market operators use faster ones.
However, there are several optimistic crypto analysts even in the short term, or in the medium-short term, until the April halving.
Some are actually not on the short term, because they fear a retracement, but on the medium-short term it is more difficult to find pessimistic analysts. In other words, before the halving there could still be a sharp retracement, but with the time horizon of the halving, which will take place in April, many clouds dissipate.
Adding Bitcoin to traditional ETFs
But the news that may have had a greater impact on the Bitcoin market is another one.
Fidelity Canada has allocated 1% in Bitcoin in its All-in-One Conservative ETF.
The Fidelity All-in-One Conservative ETF (FCNS) is an ETF by Fidelity Canada based on a multi-asset strategy with a neutral mix of approximately 40% equities and 59% fixed income ETFs. They have also added 1% in cryptocurrencies.
This is a low-cost solution designed with an integrated strategic asset allocation and consistent portfolio rebalancing.
Fidelity Investments Canada is the Canadian branch of Fidelity that operates in the Canadian market and provides services to local residents.
The fact that Fidelity, although for now only in its Canadian branch, has decided to allocate 1% of a conservative ETF like FCNS to Bitcoin says a lot about how much the company is betting on this asset.
Technically, being a Canadian fund, it did not invest in FBTC shares, which is Fidelity’s Bitcoin ETF traded on US exchanges, but in Fidelity Advantage Bitcoin ETF, which also has the ticker FBTC but is traded on the Canadian Toronto Stock Exchange. This Canadian FBTC has been around for years and owns only 3,700 BTC.
However, the basic concept does not change. In fact, even though it is only about the relatively small Canadian market, it could be a signal of what could happen in the huge US market, just as it has already happened with Bitcoin spot ETFs.
It is hardly a coincidence that a few minutes after the news of FCNS investing 1% in BTC was published yesterday, the price of Bitcoin started to rise, first to $43,500, and then later even beyond $44,000.
