Fidelity has submitted a new proposal for a Bitcoin Exchange Traded Fund to the U.S. Securities and Exchange Commission in a new step to address ongoing regulatory concerns that have hindered the approval of Bitcoin ETF investment projects.
Fidelity has updated its proposal for a Spot Bitcoin ETF in collaboration with the SEC and has submitted a modified version of the Wise Origin Bitcoin Trust to the agency. This is part of an effort to meet the SEC’s requirements, potentially increasing the chances of approval for related applications.
It’s worth noting that the SEC approved exchange-traded investment funds that hold Bitcoin futures contracts in 2021. However, it has always been hesitant to approve a Bitcoin ETF on the stock exchange, citing concerns about fraud, market manipulation, and investor protection.
Why is this seen as critical for digital currency markets?
“Such steps are seen as positive signals for the digital currency markets and further evidence that potential issuers of instant Bitcoin ETF investment funds are in discussions with the SEC regarding the necessary modifications for their approval,” said Rania Gule, a cryptocurrency analyst at brokerage XS.com who has been following the situation closely. “These are positive signs for large companies’ requests to establish such funds, which would boost liquidity in the digital market and increase Bitcoin and other major cryptocurrencies in the long run.”
Fidelity’s proposed amendments include security arrangements, handling hard forks, and the nature of energy-consuming cryptocurrency mining.
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Earlier this year, the SEC accepted several applications for review but has since postponed its decisions on proposals from Fidelity, BlackRock, VanEck, WisdomTree, Valkyrie, Bitwise, Invesco, and others, which are considered highly liquid companies.
The committee is expected to issue its decision on one or more of these exchange-traded investment funds in the first quarter of 2024, coinciding with the SEC not resuming the court’s ruling in favor of Grayscale’s private Bitcoin ETF fund. This provides a reason for optimism. Bitcoin’s price rose this week to touch $30,000 levels, coinciding with false news suggesting approval of BlackRock’s exchange-traded Bitcoin fund before dropping to trade at $28,332 at the current time.
