- Fidelity has launched a spot bitcoin ETF in Canada starting trading on Thursday.
- Fidelity is “the largest asset manager to date with a bitcoin ETF,” said Eric Balchunas, senior ETF analyst at Bloomberg.
- Spot bitcoin ETFs trade in Europe and Canada, but only futures-based ETFs have been approved in the US.
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Fidelity Investments is launching an exchange-traded fund (ETF) backed by bitcoin instead of bitcoin futures, but it is listing the fund in Canada as U.S. regulators have still not given the green light to these particular cryptocurrencies.
Fidelity Investments Canada, which is affiliated with the Boston-based asset manager, told Insider that it would launch the Fidelity Advantage Bitcoin ETF and ETF Fund “on or around December 2” under the ticker FBTC, according to its website. ETF’s bitcoin sub-depository bank, Fidelity Clearing Canada. will acquire and hold bitcoin, and investors will be able to buy and sell it on the Toronto Stock Exchange.
ETFs backed by physically settled bitcoin are available in Europe as well as Canada, where regulators approved these funds in February this year. In August, French regulators let asset manager Melanion Capital list its own spot bitcoin ETF.
“We believe that cryptocurrency is a valid asset class that we would like to offer as an investment opportunity for retail investors in Canada by including this in our product offering,” a spokesman for Fidelity Investments Canada told Insider.
US investors only have access to bitcoin futures ETFs so far. Fidelity applied to list a spot bitcoin ETF in the US back in March, but has not received approval to do so at this time. So far, US regulators have approved bitcoin futures ETFs run by ProShares, Valkyrie and VanEck.
Fidelity chose to offer a bitcoin spot ETF rather than a futures because bitcoin futures are generally in “contango”, which means that the futures price is higher than the spot price of the underlying asset, which means investors can lose money when they roll their positions.
The company also said that bitcoin futures ETFs may suffer from capacity constraints due to restrictions on the number of futures contracts that an ETF is allowed to hold at any given time.
Fidelity’s history of digital assets can be traced back to 2014, when it began research and development efforts in blockchain technology through the Fidelity Center of Applied Technology.
Some analysts believed that the Fidelity listing of a bitcoin ETF in Canada was a blow to regulators in America.
“This should be embarrassing to the SEC, that one of America’s biggest, most well-known names in investment is forced to go north to serve its clients,” said Bloomberg Senior ETF analyst Eric Balchunas. Twitter.
Crypto giant Grayscale, which applied for a spot bitcoin ETF in October, sent a letter to the SEC on Monday saying it had no basis for approving bitcoin futures ETFs and not spotting them, thereby violating the administrative protection law (APA).