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Fidelity in a Competition with BlackRock for an Ethereum ETF

Fidelity Investments Seeks Regulatory Approval for Ethereum ETF

Fidelity Investments, a major financial services firm, is pursuing regulatory clearance for an exchange-traded fund (ETF) designed to encompass Ethereum cryptocurrency.

Fidelity Investments logo with Ethereum coin

This intent was revealed in a filing made on Thursday to the Securities and Exchange Commission. Notably, this filing closely follows BlackRock’s submission of its own application for an Ethereum ETF a day prior.

An exchange under the ownership of CBOE Global Markets would host the Fidelity Ethereum Fund, as disclosed in the filing that unveiled this forthcoming product. However, prior to its launch, the U.S. Securities and Exchange Commission will deliberate on approving this Ether ETF, along with others, including one from BlackRock that was disclosed earlier this month.

The suggested Fidelity Ethereum Fund aims to mirror the value fluctuations of Ethereum, the primary token native to the Ethereum blockchain network.

“According to the Registration Statement, each Share will represent a fractional undivided beneficial interest in the Trust’s net assets. The Trust’s assets will consist of ETH held by the Custodian on behalf of the Trust.”

Company Chart

They are the 7th entity to file for a spot ETH ETF.

“U.S. retail investors have lacked a U.S. regulated, U.S. exchange- traded vehicle to gain exposure to ETH,” stated the submission. 

It additionally contended that current approaches to accessing digital assets come with inherent risks such as counterparty exposure, legal ambiguity, and technical uncertainties.

Simultaneously, it highlighted that European investors have access to regulated exchange-traded products offering exposure to a wide array of spot crypto assets.

The potential Ethereum ETF is expected to encounter regulatory challenges akin to earlier endeavours for bitcoin ETFs. Historically, the SEC has mandated agreements for surveillance sharing between the listing exchange of an ETF and the underlying spot market of an asset. Whether the SEC deems the ether futures market, initiated in 2021, as sufficiently developed to meet these criteria remains uncertain.

The submission arrives amid increasing pressure on the SEC to greenlight a spot bitcoin ETF, following the approval of futures-based bitcoin ETFs in the prior year. Supporters of cryptocurrencies advocate that a spot ETF would offer a more secure avenue for traditional investors to participate in digital assets.

On Friday, the SEC disclosed a postponement in its ruling on two spot Bitcoin ETFs—from Franklin Templeton and Global X—having previously deferred the decision on Hashdex earlier in the week.

Fidelity, overseeing a portfolio exceeding $11 trillion in customer assets, has been expanding its presence in the cryptocurrency realm. Since 2018, the firm has introduced institutional cryptocurrency trading and custody services. This year, competing asset managers like Invesco and Galaxy Digital have also submitted applications for crypto ETFs.



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