Crypto: the Fidelity ETF arrives, perhaps. The effects of its possible introduction
This week, Boston-based financial giant Fidelity filed documentation to create an exchange-traded fund (ETF) called the Wise Origin Bitcoin Trust, a name that is expected to derive from Satoshi Nakamoto's Japanese kanji. If approved, Fidelity's Bitcoin fund would trade as shares on public exchanges alongside the company's other ETFs dedicated to bonds, blue-chip stocks and other assets.
If that happens, it would be a big win not just for Fidelity but for everyone who owns Bitcoin. and for the legitimation of virtual currency in general. A giant like Fidelity does not enter a market if it does not consider it fully legitimate.
There is still an approval issue to overcome and the SEC has so far rejected dozens of applications for ETFs, but Fidelity is a very solid company, one of the pillars of the financial market, and its pricing is done through a large number of markets, from Bitstamp to Gemini to itBit to Kraken. So the price should give guarantees of fairness and liquidity and if Fidelity engages its structures it is because its lawyers believe it is the right time.
Finally, Fidelity and her attorneys, who are well-versed in SEC politics, have likely chosen to apply now because they feel the time is right with a new president and chairman of the SEC.
If Fidelity succeeds in his attempt, who will be the great great loser? The current major institutional holder of Bitcoin i.e. the Grayscale Investiment fund. This fund has so far managed to circumvent SEC regulation by bundling BTC into the fund
If the SEC grants Fidelity an ETF, the big loser will be the crypto fund Grayscale Investments. For years, Grayscale has enjoyed a profitable craft industry by packing Bitcoin into the GBTC fund and divesting its shares, a legal loophole that bypasses the SEC's ban on Bitcoin ETFs and that no one has copied so far. This led Grayscale to accumulate $ 35 billion in BTC, all with a hefty 2% fee.
The advent of an ETF will have a harsh effect on Grayscale, as the latter solution always trades at a higher price than BTC while the true Fidelity ETF should follow the price slavishly. In addition, the entry fees will be lower. Could there be an effect on the price of BTC?
We are now hovering around $ 55,000 in BTC, after hitting 60,000. The entry of Fidelity will lead to the purchase of large quantities of BTC for the financial markets and therefore we should see a rise in BTC prices, but, first of all, the ETF should be approved. And for now it is not.
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The Crypto article : the Fidelity ETF arrives, perhaps. The effects of its possible introduction come from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/cripto-arriva-letf-di-fidelity-forse-gli-effetti-della-sua-possibile-introduzione/ on Sun, 28 Mar 2021 14:46:46 +0000.