Fidelity Investments has resubmitted its application for a Bitcoin exchange-traded fund (ETF) called Wise Origin Bitcoin Trust. The initial application was filed in 2021 but was rejected by the SEC in January 2022, along with other applications for spot Bitcoin ETFs. Despite this, the recent approval of BlackRock’s spot Bitcoin ETF has sparked renewed interest among institutional investors, leading Fidelity to resubmit its application.

Growing Number of Applications

With Fidelity’s resubmission, there are now a total of nine pending applications for spot Bitcoin ETFs filed with the SEC. Other companies that have submitted applications include Ark Invest, 21Shares, Bitwise, WisdomTree, Invesco, Valkyrie, and VanEck. It is worth noting that all of these applications, except for BlackRock’s, have been denied by the SEC in the past two years. BlackRock’s successful track record with ETF approvals has raised hopes that their application will also be approved.

SEC’s Concerns and BlackRock’s Differentiating Factor

The SEC has expressed concerns about the safety of products with direct exposure to Bitcoin, citing a lack of safeguards against market manipulation. However, Elliot Johnson, the chief investment officer of Evolve ETFs, has highlighted a key differentiating factor in BlackRock’s application. BlackRock has entered into a surveillance agreement with NASDAQ, allowing its trading activity to be monitored. Johnson believes that this level of surveillance is crucial in effectively preventing market manipulation.

Uncertain Impact of Ongoing Legal Case

The SEC’s stance on spot Bitcoin ETFs has been called into question due to an ongoing legal case between Grayscale and the SEC. The court has criticized the SEC’s reasoning, as it allows for ETFs based on Bitcoin futures but not on the spot Bitcoin market. However, the outcome of this case remains uncertain and its potential impact on the SEC’s current stance is unclear.

As institutional interest in Bitcoin continues to grow, the resubmission of Fidelity’s application for a spot Bitcoin ETF reflects the increasing demand for regulated investment products in the crypto market. While the SEC has expressed concerns about market manipulation and the lack of safeguards, the surveillance agreement in BlackRock’s application has provided a potential solution. The ongoing legal case between Grayscale and the SEC further adds to the uncertainty surrounding the regulatory landscape for spot Bitcoin ETFs. As the industry awaits the SEC’s decision on these pending applications, investors remain hopeful for a breakthrough in the approval of a spot Bitcoin ETF.

Regulation

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