Fidelity Investments location in New York.
Scott Mlyn | CNBC
Fidelity Investments is preparing to launch its own bitcoin trading fund as the investment giant works to consolidate its position in the market for digital and virtual currency.
FD Asset Management, a subsidiary of Fidelity, said Wednesday it plans to provide financial support for a trading fund called the Wise Origin Bitcoin Trust.
The company submitted a Form S-1 with the Securities and Exchange Commission, an initial registration statement for the fund.
Fidelity confirmed that it had submitted a guide to support a bitcoin ETF but said it could not offer further comment due to the initial nature of the issue.
The ETF, if approved by the SEC, will monitor bitcoin performance as measured by the Bitcoin Fidelity Index movement, a barometer set by the investment giant to monitor the price of digital currency.
But whether the CSS approves the plan remains a key issue. So far the regulator has not granted any company permission to create a bitcoin ETF, arguing that the market was not yet ready despite a growing number of applications.
The SEC last week acknowledged a bitcoin ETF recommendation from VanEck.
Although the Trust does not intend to sell bitcoin, it will use the cryptocurrency to pay certain costs, which will be treated under standard IRS guidance as a sale of that digital currency.
To be sure, Fidelity’s bid to return bitcoin ETFs is far from its first venture into the expanding world of digital currencies.
He founded Fidelity Digital Assets in 2018, a subsidiary that has been using cryptocurrency capture and trading enforcement activity ever since. The agreement was early enough to attract messages from institutional investors such as hedge funds and family offices, according to its chief executive.
Bitcoin, along with thousands of other digital coins, has been buying heavily over the past 12 months as a number of investment managers and banks are comfortably considering it as both an investment opportunity and exchange medium.
While the world’s largest digital asset has been struggling for the past few weeks, its current price is around $ 52,430 far above where it traded a year ago below $ 10,000 , according to Coin Metrics.