Bitcoin is one of the best performing alternative asset classes giving the stock market a race for its money. A 30% plus rally since the start of the year attests to strong demand for the flagship cryptocurrency that is increasingly arousing institutional investors’ interest. Buoyed by the digital asset strong demand, Fidelity Investment is reportedly planning to launch a Bitcoin Fund.
Fidelity Bitcoin Fund
Regulatory filings to the Securities and Exchange Commission indicate the filling of a Notice of Exempt Offering of Securities by Fidelity Investments for the purported bitcoin fund. The issuer of the fund is Wise Origin Bitcoin Index Fund. Investors will be allowed to invest a minimum of $100,000 with Fidelity Brokerage Services and Fidelity Distributors Company poised to receive sales compensation.
The regulatory filings indicate that Fidelity Digital Assets, which acts as Fidelity brokerage investment arm, will be custody of the bitcoin fund. Likewise, the passively managed Bitcoin fund will only be available to qualified investors.
Fidelity is seeking exemption of the Bitcoin fund under Rule 506(B) of Regulation of Private placement in its filing. If successful, the brokerage firm will be able to raise an unlimited amount of money and sell securities to an unlimited number of investors. However, the firm will not be able to solicit the market, let alone carry out an aggressive advertising campaign to the market.
The unveiling of the new bitcoin fund affirms Fidelity’s commitment and push of making digital assets available to the mainstream financial sector. The filling also comes at a time when Bitcoin is becoming increasingly popular as an alternative investment tool for gaining exposure to the capital markets.
With major equities appearing overstretched, investors are increasingly turning to the flagship cryptocurrency to diversify their investment portfolio. A survey conducted recently by Fidelity Digital Assets indicates that almost 80% of institutional investors are looking for ways to invest in Bitcoin and other cryptocurrencies.
Likewise, Bitcoin has emerged as a tool for hedging against turmoil and crisis in the mainstream financial sector. It has continued to trade in tandem with Gold and U.S dollar as storage for value while acting more of a safe-haven.
Wilshire Phoenix Bitcoin Commodity Trust
Fidelity is not the only firm looking to provide investors with exposure to Bitcoin as an alternative investment tool. In June, Wilshire Phoenix filed for the launch of a publicly-traded trust dubbed Bitcoin Commodity Trust. With the regulatory filing, the firm became a direct competition with Grayscale Investment, which had already launched a $3.4 billion Bitcoin Trust.
The Wilshire Bitcoin Commodity Trust seeks to offer investors exposure to bitcoin in a manner that is not only accessible but also cost-efficient while averting the complex requirements relating to acquiring and holding the digital asset.
In addition to providing exposure to Bitcoin, the Trust will also offer exposure to U.S dollars, be it for short periods of time. The fund will come with management fees of 0.9% per year. The fund will become in direct competition with Grayscale Bitcoin Trust that currently holds 365,000 BTC valued close to $3.35 billion.