Fidelity discloses $4.7 million seed investment for its spot Ether ETF

by

As a researcher with a background in the financial industry and experience following the regulatory filings of various asset management firms, I find Fidelity’s amended S-1 filing for its spot Ethereum ETF to be an interesting development. The company is the first to file such an amendment since the U.S. Securities and Exchange Commission (SEC) approved spot Bitcoin ETFs in May.

As a crypto investor, I’ve noticed an update regarding Fidelity’s proposed spot Ethereum Exchange-Traded Fund (ETF). According to recent SEC filings released last Friday, Fidelity has made some changes to the initial S-1 submission.

An asset management company has submitted the initial amended registration filing for a Spot Ethereum ETF to the Securities and Exchange Commission (SEC), potentially signaling a bustling day for other firms aiming to gain approval for similar products.

Fidelity’s amends S-1 filing

In a recent disclosure, Fidelity revealed a $4.7 million initial investment for its new ETF. FMR Capital, an affiliate of the company, bought 125,000 shares to initiate the fund’s portfolio. According to the filing, FMR acquired these shares at a price of $38 each. Subsequently, the proceeds from this purchase were utilized to obtain approximately 1,250 Ether units.

Fidelity revealed the initial funding for its Ether exchange-traded fund (ETF), yet failed to specify the fees involved. According to Eric Balchunas, a senior ETF expert at Bloomberg, this could be a period of anticipation for the issuers as they assess what their competitors are planning.

“Fidelity initiates the filing spree for IPOs. No fees mentioned as of now, only Franklin charges 19bps. Bitwise follows suit with no mention of fees. Most investors are probably holding off and closely watching BlackRock’s disclosure to determine their next steps.”

In January, prior to the Securities and Exchange Commission (SEC) giving the green light for spot Bitcoin Exchange-Traded Funds (ETFs), issuers aimed to gain an edge by announcing low fees. Grayscale, which charges a fee of 1.5% for its GBTC ETF, has experienced significant withdrawals following this announcement.

No staking

In Fidelity’s latest announcement, it was made clear that its Ethereum ETF will forgo the inclusion of staking. Staking is a proof-of-stake mechanism whereby Ethereum holders can securely lock up their coins to aid in transaction verification and receive reward compensation.

In March, the company originally mentioned in its filing that they would include staking. However, they subsequently made a change in May and took out that mention.

When will spot Ether ETFs start trading?

In May, the Securities and Exchange Commission (SEC) granted approval for spot Ethereum exchange-traded funds (ETFs) from several applicants, including Fidelity, BlackRock, VanEck, Grayscale, Invesco Galaxy, Franklin Templeton, ARK Invest, and Bitwise.

Although the Form 19b-4s have been approved, which is a prerequisite for S-1 filings, the SEC chairman, Gary Gensler, anticipates that the commission will give its approval to the S-1s “during the summer.” Consequently, the exchange-traded funds (ETFs) can only commence trading after the S-1 approvals.

As a knowledgeable analyst, I can tell you that there are strong indications suggesting an early July launch for the anticipated event. Specifically, Balchunas from Bloomberg has hinted at a potential start date as early as the second of July.

Read More

2024-06-21 22:14