November 18, 2023

Fidelity Follows BlackRock, Files for Ethereum Spot ETF Two Days After Rival

In a move mirroring their ongoing competition for a Bitcoin Spot ETF, Fidelity Investments has submitted an application for an Ethereum Spot exchange-traded fund (ETF), following BlackRock's lead by a mere two days.

On November 17, Fidelity Investments filed with the U.S. Securities and Exchange Commission (SEC) for approval of an Ethereum Spot ETF, with Cboe BZX simultaneously submitting a 19b-4 filing outlining a proposed rule change to list and trade shares of Fidelity’s upcoming fund. Notably, Fidelity’s ether ETF closely resembles the structure of their previously proposed spot bitcoin ETF, which was presented to the SEC in late June.

This strategic move by Fidelity echoes the actions of its primary competitor, BlackRock, which filed an S-1 for its spot ether ETF on November 15, preceded by its spot bitcoin ETF application in June.

The close timing of these filings can be attributed to the exceptional stature of both asset managers in the financial landscape. BlackRock, the world's largest asset manager with $9 trillion in assets under management, is engaged in a tight race with Fidelity, the third-largest asset manager globally, boasting $4.2 trillion in assets under management.

Beyond these industry giants, several other asset management firms have submitted applications for their spot bitcoin and ether ETFs in the wake of these high-profile filings.

The Securities and Exchange Commission is anticipated to make a pivotal decision on a bitcoin ETF by January 10, 2024. This decision relates to a spot bitcoin ETF application from ARK Invest, submitted in May, approximately one month ahead of BlackRock's influential filing. The outcome may set a precedent for other pending ETF applications, many of which share intentional similarities to meet regulatory expectations.

While the SEC will assess spot bitcoin and spot ether ETFs separately, the approval of one type of fund could potentially pave the way for the other. Notably, although the SEC has not yet greenlit any bitcoin or ether spot ETFs, it has approved futures ETFs for both cryptocurrencies in recent months and years.

It is noteworthy that the news of an ETF seems to have had no impact on the price of ether (ETH), in stark contrast to the striking effect it had on the price of bitcoin (BTC). While BTC responded to such announcements, ETH appears to remain unaffected.

These divergent market reactions may suggest differences in perception and response to the introduction of ETFs for different cryptocurrencies. It could be interesting to further observe and understand this dynamic, as it underscores the complexity of the crypto markets and reflects the diversity in investor responses to different assets.

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