Europeans are increasingly interested in holding cryptocurrency, so London-based Fidelity International has launched an exchange-traded fund for Bitcoin on Deutsche Börse Xetra.
After this launch, both professional and institutional investors from Europe can invest in these ETFs which are currently listed on Xetra, and soon it will also be available on the SIX stock exchange in Zurich, Switzerland.
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The custodian of the ETF is Fidelity Digital Assets and it has a charge of 0.75%. The ETF has been classified as Crypto ETN (Exchange-Traded Note).
The ETFs will be physically backed by Bitcoin held in custody with Fidelity Digital Assets, whereas Eurex Clearing will provide clearing services and Brown Brothers Harriman will act as the administrator and transfer agent.
Speaking on this launch, Nick King, ETFs head of the company, said that this is the first step towards digital assets and after the response, the company can launch more such ETFs for other cryptocurrencies too.
Explaining why the company decided to launch the ETFs, King said that this was done after new research from Fidelity Digital Assets’ 2021 Institutional Investor Digital Assets Study done by Fidelity Digital Assets indicated that 71% of the institutional investors are looking to invest in digital assets.
The study also found that the adoption of crypto is higher in Asia with 71% than in Europe and the U.S., participation increased in both markets as 56% of European institutions and 33% of U.S. institutions now hold investments in the asset class, up from 45% and 27%, respectively, the prior year.
Commenting on this study results, Tom Jessop, president of Fidelity Digital Assets said, with the growing sophistication and institutionalization of the digital assets ecosystem, there has been an increase in interest and adoption of cryptocurrencies.
The launch of Fidelity Bitcoin ETF comes a few months after Invesco’s Bitcoin ETF.
In September 2021, the Swiss Financial Market Supervisory Authority (FINMA), the Swiss financial watchdog, granted two licenses to the firm SIX Digital Exchange.
This allows SIX to operate as a stock exchange and depository for blockchain-based securities where Fidelity Bitcoin ETF will also be traded.
Christian Staub, managing director for Europe at Fidelity International in a statement said that providing institutional and professional investors access to this innovative asset class at a competitive price point is our priority, and Fidelity Bitcoin ETF offers clients an institutional quality solution to enter the market in a familiar, simple and secure way.
More crypto products on exchanges
The launch of the ETF gives investors simple and efficient access to the performance of Bitcoin, the largest cryptocurrency by market capitalization.
After this, Xetra is now offering over 40 products from nine providers. That includes Bitcoin, Bitcoin Cash, Cardano, Ethereum, Litecoin, Polkadot, Solana, Stellar, Tezos and TRON as well as five baskets of cryptocurrencies.
Investors can trade in these ETFs without having to set up crypto wallets or use unregulated crypto trading venues.
Even though Bitcoin ETFs are launched in Europe and Canada, the US’s Securities and Exchange Commission (SEC) have turned down various Bitcoin ETFs proposals citing the potential for fraud and market manipulation.
Established in 1969 as an international investment subsidiary of the Boston-based financial services giant, Fidelity Investments, it became an independent firm in 1980.
Fidelity International currently manages $800 billion in assets with over 2.5 million clients across Asia Pacific, Europe, the Middle East, South America, and Canada.
