Home Bitcoin News Fidelity Files Second Amendment for Bitcoin ETF as SEC Reviews BlackRock’s Application

Fidelity Files Second Amendment for Bitcoin ETF as SEC Reviews BlackRock’s Application

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Fidelity Investments, a renowned financial services company, has submitted a second amendment to its application for a spot Bitcoin exchange-traded fund (ETF) with the US Securities and Exchange Commission (SEC). This move follows the SEC’s request for additional information on the initial application. In a similar vein, BlackRock has also submitted an application for a Bitcoin ETF, incorporating some of the SEC’s concerns. However, recent developments and a court ruling on XRP may have implications for the regulatory landscape surrounding cryptocurrency investments.

Bloomberg Intelligence analyst James Seyffart noted that the text of Fidelity’s second amendment appears to be virtually identical to that of the first application. Generally, if the changes made are merely formal, the revised application may face rejection on the same grounds as the initial one. In contrast, BlackRock’s updated application addressed some of the SEC’s concerns and provided additional information to clarify doubts raised by the agency.

However, the situation may have shifted since then. Previously, there was a lingering concern in the crypto market that many altcoins could be classified as securities. The SEC had designated several dozen cryptocurrencies as such, potentially endangering spot markets and leading to partial closures. However, a recent court ruling has challenged this notion by stating that cryptocurrencies traded on exchanges cannot be considered investment contracts.

It is important to highlight that while the SEC does not have the legal authority to determine whether a cryptocurrency is a security, the courts do. The recent ruling in the SEC vs Ripple case declared that XRP, when sold by third parties on crypto exchanges, should not be deemed an unregistered security. This ruling is expected to have implications for other cryptocurrencies, indicating that the SEC may have lost its battle against exchanges accused of selling unregistered securities.

These developments may have significantly altered the regulatory landscape in which the SEC operates, potentially leading Fidelity to hope for a more lenient approach from the agency. However, it remains uncertain whether the SEC will approve an application identical to the one it rejected just a few days ago. It is more plausible that the SEC might eventually approve BlackRock’s application, given that it has addressed some of the agency’s concerns and provides greater assurances.

Notably, if an ETF from BlackRock or other firms is approved instead, Fidelity’s ETF may not be strictly necessary for the US market. However, it is worth noting that in Europe, the launch of the first authorized Bitcoin ETF on Euronext Amsterdam with the ticker BCOIN is imminent. The launch, originally planned twelve months ago but delayed due to market conditions, reflects changing demand for investment vehicles since last summer. While Europe has already had similar derivative products in the form of Exchange Traded Notes (ETNs), an ETF allows investors to own underlying shares of the fund itself, distinguishing it from ETNs.

If the market situation has changed in Europe, it is likely that the same may be true for the US, potentially impacting the SEC’s perspective. Whether the reassurances presented by BlackRock are deemed sufficient or if the evolving landscape enables approval for Fidelity’s new application, which is nearly identical to the previous one, remains to be seen.

As the cryptocurrency market continues to evolve and regulatory frameworks adapt, the fate of spot Bitcoin ETFs in the US remains uncertain. Europe’s forthcoming Bitcoin ETF launch signifies a significant development for the region and highlights the growing interest in cryptocurrency investment opportunities.

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James

James T, a passionate crypto journalist from South Africa, explores Litecoin, Dash, & Bitcoin intricacies. Loves sharing insights. Enjoy his work? Donate to support! Dash: XrD3ZdZAebm988BfHr1vqZZu6amSGuKR5F

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