25 Mar 2021 Pavel Petrov
Goldman Sachs And Fidelity Seek Bitcoin Exposure With BTC-Related ETFs
One of the largest asset managers worldwide, like Fidelity and Goldman Sachs, are entering indirectly into the crypto race by filing applications with the U.S. Securities and Exchange Commission (SEC) for crypto-related investment products.
For instance, Fidelity submitted paperwork for the Wise Origin Bitcoin Trust on March 24 and if approved, the investment product would become the first U.S.-based Bitcoin exchange-traded fund (ETF).
Fidelity would use the Trust to track the daily performance of Bitcoin by utilizing the Fidelity Bitcoin Index PR.
“The Trust provides direct exposure to bitcoin, and the Shares of the Trust are valued on a daily basis using the same methodology used to calculate the Index,” Fidelity noted in the ETF prospectus.
Investors can access the new ETF via a traditional brokerage account, removing “potential barriers to entry or risks involved with holding or transferring bitcoin directly.”
The battle for a U.S-based ETF ranges back to the late 2017 crypto bull run, which skyrocketed Bitcoin to over $20,000. However, the SEC didn’t approve a single ETF proposal so far, as lawmakers have been concerned about extreme volatility and price manipulation of the world’s largest cryptocurrency.
Goldman Sachs, on the other hand, decided to give their users indirect exposure to Bitcoin by issuing a note, which will track the movement of the ARK Innovation ETF. The Ark Innovation ETF, in turn, is invested in the Grayscale Bitcoin Investment Trust.
However, the main difference between Fidelity’s filing and Goldman Sachs’ proposal is that Fidelity wants to grant its users direct exposure to Bitcoin via an ETF, while Goldman Sachs will track an ETF exposed to Bitcoin shares.
Goldman Sachs was skeptical about Bitcoin and its presence in the financial world, up until last year when the bank denied recognizing Bitcoin as an asset class.
Meanwhile, ETF analyst Eric Balchunas stated that Goldman's new Bitcoin-linked product is “like a side bet for its bigger institutional clients.”
“It has all kinds of different parts to the bet but it all involves riffing off the price of ARKK, hence the word ‘ETF’ in there,” Balchunas noted.Bitcoin Cryptocurrency SEC Crypto Market crypto market monitoring cryptocurrencies bitcoin news cryptocurrency news bitcoin news today SEC Security and Exchange Commission cryptocurrency market