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Fidelity files for first US bitcoin ETF as mainsteam interest ramps up

Fidelity said it wants to make it easier for institutional investors to get into the cryptocurrency market.

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Fidelity, the fund group with assets under management of almost US$5trn, has become the latest Wall Street heavyweight to test the water for bitcoin products.

The group has filed with US regulator the SEC to launch a bitcoin ETF as the US financial mainstream tiptoes towards acceptance of the cryptocurrency.

If Fidelity gets approval, it would be the US's first bitcoin ETF and a clear sign of the growing comfort of monetary authorities with the cryptocurrency.

The Wise Origin Bitcoin Trust will track Fidelity's own bitcoin index using prices on quoted exchanges such as Coinbase and Bitstamp.

In a statement, Fidelity said it wants to make it easier for institutional investors to get into the cryptocurrency market.

Other household financial names are also stepping up their crypto activity.

JP Morgan recently said investors should allocate up to 1% of their portfolio into bitcoin as a hedge for other asset classes. 

Goldman Sachs, meanwhile, last week filed to launch a new product that would track bitcoin indirectly through a link to the ARK Innovation ETF, which is invested in the Grayscale Bitcoin Investment Trust.

Like JP Morgan, Goldman had previously been avowedly against the cryptocurrency but its attitude has changed sufficiently for it to reopen its trading desk.

Commentators expect a flood of bitcoin ETFs as soon as one breaks the ceiling.

Others jostling to get a US bitcoin ETF approved include product specialist VanEck which filed in March 1 having had previous attempts rejected.

The SEC has acknowledged VanEck's latest application, which has started a 45-day deadline to make an initial decision.

Wilshire Phoenix, another specialist, was also turned down in February 2021 on the grounds that a bitcoin ETF might be open to market manipulation.

UK-based HANetf launched an exchange-traded cryptocurrency (ETC) last year, called BTCetc Bitcoin Exchange Traded Crypto (BTCE), which tracks the price of bitcoin is traded on Deutsche Börse's XETRA exchange.

It was the world’s first centrally cleared Bitcoin ETC and HANetf says it provides investors with one of the safest and most liquid ways to gain exposure to Bitcoin, with each unit of BTCE giving the holder a claim on a predefined amount of Bitcoin.

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