Skip to main content

Fidelity Files 19b-4 for Spot Ethereum ETF, Aiming to Boost Investor Protection in Crypto Space

Fidelity Files 19b-4 for Spot Ethereum ETF, Aiming to Boost Investor Protection in Crypto Space

The asset manager Fidelity has filed a 19b-4 with the Securities and Exchange Commission (SEC) to list a spot ethereum exchange-traded fund (ETF) on the Cboe BZX Exchange. The proposed ETF would hold physical ethereum (ETH) tokens and seek to track the Fidelity Ethereum Index, providing exposure to ether’s daily price movements.

Fidelity’s Latest 19b-4 Filing Highlights Spot Ethereum ETF

The Fidelity Ethereum Fund aims to launch as a U.S.-regulated spot ETF for the second-largest cryptocurrency by market capitalization. Fidelity’s 19b-4 filing says currently, the options for U.S. investors’ ethereum exposure are limited to over-the-counter (OTC) ether funds carrying high fees and volatile premiums or discounts.

Fidelity contends approval of a spot ETF would represent a major win for investor protection in the crypto space by reducing risks associated with existing ether funds. The 19b-4 account bears resemblance to Blackrock’s latest submission for a spot ether ETF, echoing comparable rationale.

“Approval of a spot ETH ETP would represent a major win for the protection of U.S. investors in the crypto asset space,” the filing states. “The Trust, like all other series of Commodity-Based Trust Shares, is designed to protect investors against the risk of losses through fraud and insolvency that arise by holding digital assets, including ETH, on centralized platforms.”

The proposed ETF’s pricing mechanism would be similar to CME Ether futures and utilize price feeds from major spot exchanges. Fidelity argues this should satisfy the SEC’s standard requiring surveillance-sharing agreements with a regulated market of significant size. The filing cites recent court decisions stipulating the CME futures market meets this standard for spot bitcoin ETFs.

“Both the Exchange and CME are members of ISG. The only remaining issue to be addressed is whether the ETH Futures market constitutes a market of significant size, which both the Exchange and the Sponsor believe that it does,” the filing states.

Fidelity’s proposed spot ethereum ETF would directly hold ether in cold storage to eliminate counterparty risks, value shares daily based on a spot price index, and let authorized participants exchange ether for share creations/redemptions. When shares are created or redeemed, the fund would exchange ether directly with authorized participants in blocks called “Creation Baskets.”

In tandem with Blackrock, Fidelity aligns with Ark Invest, 21shares, and Vaneck in its endeavor to introduce a spot ether ETF. Similar to Blackrock, Fidelity has simply filed a 19b-4 for record keeping purposes and will likely follow up with an S-1 form to register their product with the SEC.

What do you think about the Fidelity registration for a spot ethereum ETF? Share your thoughts and opinions about this subject in the comments section below.



from Bitcoin News https://ift.tt/on0vsGZ
Labels:

Comments

Post a Comment

Popular posts from this blog

Mt Gox Creditors Updated, Trustee Says Rehabilitation Custodian Is ‘Currently Preparing to Make Repayments’

On August 31, 2022, the Mt Gox trustee Nobuaki Kobayashi explained in a recent letter that the rehabilitation custodian is “currently preparing to make repayments” to Mt Gox creditors. Trustee Updates Mt Gox Creditors — Repayment Date and Exchange Still Unknown Last week speculation and rumors concerning the release of 140K bitcoin ( BTC ) from Mt Gox littered social media platforms and headlines. Bitcoin.com News covered the situation six days ago as a number of people and Mt Gox creditors called the rumors “ fake news .” During that same period of time, a bitcoin whale transferred 10,000 BTC to unknown wallets, and a 2018 annotation , heuristics, and clustering methods show the funds likely originated from the June 2011 Mt Gox hacks. Following the mysterious whale transfer, last Wednesday, Mt Gox published an official update from the court trustee Nobuaki Kobayashi that explains the court is “currently preparing to make repayments” to creditors. Mt Gox creditors have been wait...
Post a Comment
Read more

Economists Discuss Russia, China Potentially Developing Gold-Backed Currency That Could Undermine US Dollar

Economists have weighed in on reports that China and Russia may be developing a new gold-backed currency that could undermine the U.S. dollar’s status as the world’s primary reserve currency. Russia and China May Be Developing Gold-Backed Currency Several experts have shared their views on Russia and China potentially creating a new gold-baked currency, Fox Business reported Saturday, emphasizing that China has been buying up huge quantities of gold while Russia was forced off the U.S. dollar due to sanctions imposed on the country following its invasion of Ukraine. The news outlet noted that some experts have cautioned that these moves, along with the closer relationship that has developed between Moscow and Beijing, point to the likelihood of China attempting to launch a gold-backed currency. However, neither Russia nor China has officially confirmed plans for such a currency. Craig Singleton, senior fellow at the Foundation for Defense of Democracies and a former U.S. diplomat,...
Post a Comment
Read more

Fidelity Discusses Bitcoin as Portfolio Insurance — Could Soon Stand in ‘Stark Contrast’ to Path Fiat Currencies Take

Fidelity Digital Assets, a subsidiary of Fidelity Investments, says that bitcoin could be considered portfolio insurance. The firm notes that the cryptocurrency “may soon stand in stark contrast to the path that the rest of the world and fiat currencies may take — namely the path of increased supply, additional currency creation, and central bank balance sheet expansion.” Fidelity Says Bitcoin Could Be Portfolio Insurance Fidelity Digital Assets, a subsidiary of Fidelity Investments, recently published a research study titled “The Rising Dollar and Bitcoin.” The research outlines “how bitcoin could be considered portfolio insurance” as the rising dollar impacts global currency markets. “The strengthening U.S. dollar is wreaking havoc among other countries and may put pressure on the Federal Reserve to soon reverse its tightening monetary actions, something that has precedent based on 1985’s Plaza Accord,” Fidelity explained. In addition, “more monetary debasement may be needed to ...
Post a Comment
Read more