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Fidelity Executives Meet With the SEC in Effort To Launch a Bitcoin Exchange-Traded Product

Financial services giant Fidelity recently discussed a Bitcoin exchange-traded product with the U.S. Securities and Exchange Commission (SEC).

According to a memorandum of the meeting dated September 8th, senior Fidelity executives met with SEC staff for a presentation that featured information on the Wise Origin Bitcoin Trust – a proposed Bitcoin exchange-traded fund to be operated by Fidelity.

 

In the memo, Fidelity says that developed market regulators in other countries – including Canada, Germany, Sweden, and Switzerland – have already approved Bitcoin exchange-traded products (ETPs).

The financial services giant says that Bitcoin futures-based products are not a “necessary interim step” prior to approving Bitcoin ETPs.

“We believe Bitcoin futures-based products are not a necessary interim step before a Bitcoin ETP; firms should be able to meet investor demand for direct exposure to Bitcoin through ’33 Act Bitcoin ETPs because the Bitcoin market has matured and can support them.”

However, in a speech last month SEC Chairman Gary Gensler suggested that Bitcoin futures-based products offer investors “important protections.”

The Securities Act of 1933 aims to protect consumers by prohibiting fraud and ensuring that they receive sufficient information prior to investing.

Fidelity says that the Bitcoin market has already matured, noting that trading volume has increased while spot trading costs have reduced.

The firm points out that Bitcoin spot volume more than tripled from $400 billion in the fourth quarter of 2020 to $1.3 trillion in the first quarter of 2021. The Bitcoin futures volume tripled over the same period from $2.5 trillion to $7.5 trillion.

Giving the example of a $10 million Bitcoin spot trade, Fidelity says the cost fell from 50 basis points in January of 2020 to 20 basis points in February of 2021.



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