A Fidelity Investments location in New York.
Scott Mlyn | CNBC
Fidelity Investments prepares to launch its own bitcoin fund as the investment giant works 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 the Wise Origin Bitcoin Trust.
The company filed a Form S-1 with the Securities and Exchange Commission, a preliminary registration statement for the fund.
Fidelity confirmed it had filed a prospectus to sponsor a bitcoin ETF, but said it could not provide further comment due to the preliminary nature of the filing.
The ETF will track bitcoin’s performance as measured by the movement of the Fidelity Bitcoin Index, a barometer established by the investment giant to track the price of the digital currency.
While the Trust does not intend to sell bitcoin, it will use the cryptocurrency to pay for certain expenses, which will be treated as a sale of such digital currency under current IRS guidelines.
To be sure, Fidelity’s bid to back a bitcoin ETF is far from his first venture into the growing world of digital currencies.
It founded Fidelity Digital Assets in 2018, a subsidiary that has since implemented its cryptocurrency custody and transaction execution. The early approval was enough to attract clients ranging from institutional investors such as hedge funds and family offices, the CEO said.
Bitcoin, along with thousands of other digital coins, has seen a wave of purchases over the past 12 months as a growing number of investment managers and banks feel comfortable as it is both a potential investment opportunity and a medium of exchange.
While the world’s largest digital asset has struggled in recent weeks, its current price is around $ 52,430 well above the price that traded below $ 10,000 a year ago, according to Coin Metrics.