Fidelity Files for Spot ETH ETF, Follows BlackRock’s Footsteps

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Key Takeaways

  • The Fidelity Ethereum Fund would grant investors exposure to the ETH.
  • The filing contends that U.S. retail investors lack a low-risk avenue to expose themselves to ETH.

Money management giant Fidelity has filed for the creation of an exchange-traded fund (ETF) focused on Ethereum’s ether (ETH). The proposed Fidelity Ethereum Fund aims to be listed by an exchange owned by Cboe Global Markets, as revealed in a filing posted by the exchange on November 17. This development comes in the wake of Fidelity’s ambition to expand its crypto offerings, following in the footsteps of rival BlackRock.

The Fidelity Ethereum Fund would grant investors exposure to the second-largest cryptocurrency, ETH, and is awaiting approval from the U.S. Securities and Exchange Commission (SEC). Fidelity, managing assets totaling $4.5 trillion, is seeking to provide investors with a convenient avenue to gain exposure to Ethereum, mirroring its previous move into the bitcoin ETF space.

ETFs holding major cryptocurrencies like BTC or ETH are anticipated to have a transformative impact on the crypto market. If approved, these ETFs would offer a more accessible entry point for investors compared to directly purchasing cryptocurrencies. Traditional brokerage accounts can easily provide access to ETFs, which trade similarly to stocks and cover assets ranging from the broader stock market to commodities like gold, corn, and sugar.

Fidelity’s filing emphasizes that the approval of an Ethereum ETF would mark a significant milestone in safeguarding U.S. investors in the crypto space. The company argues that without such products, investors may resort to riskier alternatives to gain exposure to digital assets.

The filing also references a recent Grayscale court ruling, where the court criticized the SEC for lacking a coherent reason to reject spot crypto ETFs while allowing futures-based products. Fidelity’s move follows its June filing for a spot bitcoin ETF, echoing the footsteps of BlackRock’s entry into the crypto ETF arena.

The filing contends that U.S. retail investors currently lack a low-risk avenue to expose themselves to ETH, citing counter-party risk, legal uncertainty, and technical risk associated with existing methods of accessing the digital asset. It points out that European investors already have access to regulated products providing exposure to a range of spot crypto assets.

This development follows closely on the heels of BlackRock’s official filing for a spot Ether ETF, the iShares Ethereum Trust, showcasing a growing trend among financial giants to facilitate easier access to cryptocurrencies through ETFs.

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Saniya Raahath
Saniya Raahath

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