Fidelity Joins BlackRock in Race for Ethereum ETF

Financial services giant Fidelity Investments is seeking regulatory approval to launch an exchange-traded fund (ETF) that would hold the Ethereum cryptocurrency, according to a Thursday filing with the Securities and Exchange Commission. The filing comes a day after BlackRock submitted its own Ethereum ETF application.

The proposed Fidelity Ethereum Fund would track the price of Ethereum, the native token of the Ethereum blockchain network. The ETF’s shares would trade on the Cboe BZX Exchange under the ticker symbol ETHF.

Fidelity said the ETF aims “to seek to track the performance of Ether, as measured by the performance of the Fidelity Ethereum Index.” The index represents the U.S. dollar price of ether based on trading activity across major ether trading platforms.

“They are the seventh filer for spot Ethereum,” Jaymes Seyffart, ETF research analyst, wrote on Twitter, noting earlier filings by BlackRock, Grayscale, 21Shares/ARK, VanEck, and Hashdex.

BlackRock is the most notable applicant, bringing with it the scale and expertise necessary to manage more than $9.4 trillion in assets. Hashdex joined the fray in August.

The filing comes as the SEC has faced mounting pressure to approve a spot bitcoin ETF after approving futures-based bitcoin ETFs last year. Cryptocurrency proponents argue that a spot ETF would provide a safer way for mainstream investors to gain exposure to digital assets.

Late Friday, the SEC announced that it was delaying its decision on two spot Bitcoin ETFs—from Franklin Templeton and Global X—after pushing back Hashdex earlier this week.

“Heretofore, U.S. retail investors have lacked a U.S. regulated, U.S. exchange-traded vehicle to gain exposure to [Ethereum],” Fidelity said in its proposal. “Meanwhile, investors in other countries… are able to use more traditional exchange-listed and traded products.”

The proposed Ethereum ETF would face regulatory hurdles similar to previous attempts at bitcoin ETFs. The SEC has typically required surveillance-sharing agreements between an ETF’s listing exchange and the underlying spot market for an asset. It remains unclear if the SEC views the ether futures market, which launched in 2021, as mature enough to meet that standard.

Fidelity, which manages over $11 trillion in customer assets, has been growing its cryptocurrency business. The firm launched institutional cryptocurrency trading and custody services in 2018. Rival asset managers including Invesco and Galaxy Digital have also filed for crypto ETFs this year.

This story was drafted with Decrypt AI from sources referenced in the text, and fact-checked by Ryan Ozawa.