Fidelity Files Spot Ether ETF Application

Fidelity Files Spot Ether ETF Application

The financial services giant pushed forward with its filing, despite SEC concerns about these products.

ETF.com
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Contributing Editor
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Reviewed by: etf.com Staff
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Edited by: Kent Thune

Financial services giant Fidelity Investments has pressed forward with its plans to offer an ETF based primarily on the price of ether, the token of the Ethereum blockchain, filing a registration statement with the Securities and Exchange Commission on Wednesday.

Fidelity said in the S-1 filing that its Ethereum Fund would “seek to track the performance of ether,” and trade on the Cboe BZX Exchange. Fidelity did not mention the proposed fund’s ticker or fee. The fund will hold ether and value its shares based on a Fidelity index based on price feeds from various spot markets, Fidelity said in the filing.

Ether, the second-largest cryptocurrency by market capitalization, was recently trading just below $3,600, up 2% over the past 24 hours. It has risen more than 55% this year. Bitcoin, the no. 1 cryptocurrency, was recently trading over $71,000, up more than 60% year-to-date.

Interest in cryptocurrency investments has skyrocketed this year following the SEC’s early January approval of 10 spot bitcoin ETFs, which track bitcoin’s price. Those new products have generated nearly $12 billion in net flows and hold over $57 billion in assets under management.

In spite of the widespread embrace of bitcoin ETFs, spot Ethereum ETFs have met resistance and investor appetite for them appears cool. Earlier this month, the SEC delayed making a decision on the spot Ethereum applications from Fidelity and BlackRock Inc., and started comments periods for the proposed products. Investors can currently purchase shares in Ethereum futures ETFs, which the SEC greenlit in October.

SEC Requests Feedback on Ethereum ETFs

The agency requested public input on whether the arguments favoring spot bitcoin ETF approval would apply to the spot Ethereum ETFs, how they might differ from futures ether funds currently available, and if the proposed products would be vulnerable to manipulation. In the lengthy run-up to spot bitcoin ETF approval, the SEC voiced similar concerns about manipulation.

Bitwise Asset Management, Ark Invest, and Franklin Templeton are also seeking to create spot Ethereum ETFs.

The SEC delay earlier this month was largely expected by analysts, who foresee May as the date to watch for the regulator to make a final decision on the funds.

“The only date that matters for spot ethereum ETFs at this time is May 23,” Bloomberg ETF analyst James Seyffart wrote on Twitter/X after Invesco’s filing was punted in early February. May 23 is the final deadline for VanEck's spot ether fund.

James Rubin is a contributing editor for etf.com, where he produces the Morning Exchange and Weekly Exchange newsletters. A longtime financial writer, editor and book author, he formerly held positions as a news and markets editor for the Americas at CoinDesk, where he focussed on cryptocurrencies. 

He provided editorial guidance for a Wall Street Journal best-selling book on Bitcoin and oversaw a startup newsroom focused on digital financial assets. He has edited for TheStreet and Unchained, where he wrote daily news stories about the trial of fallen crypto entrepreneur Sam Bankman-Fried. His writing has also appeared in The Hollywood Reporter, Forbes.com, AdWeek, Bankrate, The Financial Brand and The Wall Street Journal. He has also written for Forbes Insights and the Economist Intelligence Unit, including papers presented at World Economic Forums in Davos and Mumbai. 

James is the co-author of The Urban Cyclist’s Survival Guide (Triumph Books) and has been interviewed about bike safety on a number of NPR affiliates. In a prior career, Rubin was a world-ranked tennis player, once competing in Wimbledon’s qualifying rounds. He speaks fluent German and is a graduate of the Columbia University Graduate School of Journalism and received his BA at Columbia University.