Fidelity to Launch Ethereum Index Fund After Clients Demand Exposure Beyond Bitcoin

October 14, 2022

Undoubtedly, Bitcoin is a leading crypto asset, capping most of the market. However, there are other digital currencies too that are walking right behind it and have got a huge market as well. You can find out about different cryptocurrencies on Bitcoinsentralen.

It is common for news and investment outlets to focus on Bitcoin (BTC) because of its leading reputation, most volatility, and impactful stand. But a lot of crypto traders keep themselves invested in other cryptocurrencies too, and demand investment and management outlets to focus on other cryptocurrencies as well as they are focusing on the leading one. 

All of it leads up to this: Fidelity is launching Ethereum Index Fund because clients have a “demand for exposure to digital assets beyond Bitcoin.”

Fidelity Investments, usually referred to as Fidelity, is an American multinational investment and financial services company. Fidelity has a Bitcoin Index Fund that lets the clients store Bitcoin in the company and earn gains. 

The private asset management and investment company has more than $9.9 trillion worth of assets under administration and around $3.7 trillion worth in discretionary assets. 

Now, it is launching Ethereum Index Fund as well amidst the demands of the clients for asset exposure beyond Bitcoin, which would expand the company’s cryptocurrency offerings to its 3.44 million retail accounts. In this article, you will know everything there is to know about the newly-launched index fund.

Filing with the US SEC

Fidelity has filed with the US Securities and Exchange Commission (SEC) to launch an investment product fund which would be called Fidelity Ethereum Index Fund. It was officially registered on Tuesday, 4th October, 2022.

The Fidelity Bitcoin Index Fund is named FIDBTCPL, while the Fidelity Ethereum Index Fund PR is named FIDETHP.

Moreover, although the new index fund is not tradable on exchange, it is said to be designed as the traditional limited partnership investment. 

What is Traditional Limited Partnership?

As per the filing launched with the SEC, Fidelity has set the minimum amount of investment for this fund to be $50,000. At the time of the filing, the fund had just a little more than $5 mil worth of Ethereum. 

Since it is reported from numerous resources that this fund is not an exchange-traded fund (ETF) but a traditional limited partnership, some readers are a little concerned about what it means.

Well, a limited partnership is a partnership between two or more parties where one partner is the one that manages all of the business and others are limited partners (with limited liability) that are not involved in daily operations.

Why Did Fidelity Launch an Ethereum Index Fund?

Fidelity took almost two years to launch a Fidelity Ethereum Index Fund after it launched a Fidelity Bitcoin Index Fund, which makes a lot of people curious as to what finally led up to this advancement.

A spokesperson from Fidelity answered to this by saying that the company has been continuously receiving demands from the clients of exposure to more assets apart from Bitcoin. 

The new fund, FIDETHP, has the prices benchmarked using Ethereum’s price feeds. These price feeds are obtained from the “approved” exchange platforms across the globe.

When Did Fidelity Decide to Introduce Crypto?

As stated above, Ethereum was not the first crypto Fidelity has launched the index fund in. The company’s first expansion to crypto assets was in 2018, when it launched the Bitcoin Index Fund and received some good investments.

In April of this year, Fidelity announced the 401K retirement accounts in Bitcoin. Reportedly, the investment company was also planning to open Bitcoin trading on its brokerage platforms.

Although Fidelity dived into the crypto game in 2018, it has been working its way deeper ever since.

At the mid-September SALT Conf. New York, the CEO of Galaxy Digital Holdings hinted towards Fidelity expanding the portfolio of their retail customers with crypto. Month later, Fidelity announced with the launch of Ethereum Index Fund that retailer accounts no would be able to invest in Ethereum as a limited partnership.

Undoubtedly, Fidelity is on the way to constantly expand its portfolio of investments and introduce and new and advanced crypto projects to its clients.


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