Fidelity, a prominent asset management firm overseeing an impressive $4.5 trillion in assets, has joined the growing list of entities seeking approval for a spot Ether exchange-traded fund (ETF).
Their request was formally submitted to the United States Securities and Exchange Commission (SEC) on November 17.
Fidelity’s proposal centers around listing and trading shares of the Fidelity Ethereum Fund on the Cboe BZX Exchange.
The filing outlines the structure of the proposed ETF, where each share will represent a fractional undivided beneficial interest in the Trust’s net assets.
These assets will primarily consist of Ethereum (ETH), securely held by a Custodian on behalf of the Trust.
One of the primary motivations behind Fidelity’s request is to provide U.S. citizens with a secure and regulated vehicle for gaining exposure to ETH.
The filing argues that up until now, American retail investors have been deprived of a low-risk option for investing in Ethereum.
It emphasizes that the existing methods for accessing digital assets in the United States involve significant counter-party risk, legal uncertainties, and technical complexities.
In contrast, the filing points out that European investors have access to products that are traded on regulated exchanges and offer exposure to a wide range of spot cryptocurrency assets.
As an example, it mentions the approval of the Jacobi Bitcoin ETF for listing on the Euronext Amsterdam stock exchange, demonstrating the more favorable environment for cryptocurrency investment in Europe.
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Fidelity also highlights the potential benefits of an Ether ETF for American investors, suggesting that it could have mitigated losses suffered by investors involved with now-defunct firms like FTX, Celsius Network, and BlockFi.
The filing suggests that if a Spot ETH ETP (Exchange-Traded Product) had been available, a substantial portion of the funds tied up in these defunct companies might still be held in the brokerage accounts of U.S. investors.
Fidelity’s move to seek approval for a spot Ether ETF follows BlackRock’s recent filing for a similar product, the iShares Ethereum Trust, with the SEC on November 16.
This development comes after BlackRock previously registered the iShares Ethereum Trust with Delaware’s Division of Corporations, about six months after filing its spot Bitcoin ETF application.
Notably, Fidelity is the seventh firm to apply for an Ether ETF, joining a list that includes VanEck, 21Shares, ARK Invest, Hashdex, Grayscale, and Invesco Galaxy, as the financial industry continues to explore opportunities in the rapidly evolving cryptocurrency market.
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