A Fidelity Investments location in New York.
Scott Mlyn | CNBC
Fidelity Investments is preparing to launch its own bitcoin fund as the investment giant works to consolidate its weight in the digital asset and virtual currency market.
FD Funds Management, a subsidiary of Fidelity, said Wednesday it plans to provide financial support for a publicly traded fund called the Wise Origin Bitcoin Trust.
The firm filed an S-1 form with the Securities and Exchange Commission, a preliminary registration statement of the fund.
Fidelity confirmed that it submitted a brochure to sponsor a Bitcoin ETF, but said it could not comment due to the preliminary nature of the presentation.
The ETF will track the performance of bitcoin, measured by the performance of the Fidelity Bitcoin Index, a barometer set by the investment giant to track the price of digital currency.
Although the Trust does not intend to sell bitcoins, it will use bitcoins to pay for certain expenses, which according to current IRS guidelines will be treated as a sale of this bitcoin.
Of course, Fidelity’s commitment to supporting a bitcoin ETF is far from its first adventure in the expanding world of digital currencies.
It established Fidelity Digital Assets in 2018, a subsidiary that has since deployed its operations of custody and commercial execution of cryptocurrencies. The first guarantee was enough to attract customers ranging from institutional investors such as hedge funds and family offices, according to its top executive.
Bitcoin, along with thousands of other digital currencies, has seen a surge in purchases over the past twelve months, as a growing number of investment managers and banks feel comfortable viewing it as a potential investment opportunity and a means of exchange.
While the world’s largest digital asset has been in trouble in recent weeks, its current price of around $ 52,430 is well above what it was trading a year ago below $ 10,000, according to Coin Metrics.
This is a developing story. Stay tuned for updates.