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Fidelity to Launch Spot Bitcoin ETF This Week

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Wed, 12/01/2021 - 09:05
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Arman Shirinyan
Fidelity is aiming to launch its first spot Bitcoin ETF
Fidelity to Launch Spot Bitcoin ETF This Week
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Fidelity, an American multinational financial services corporation, is set to launch its first spot Bitcoin ETF in Canada this week, according to Bloomberg senior ETF analysts.

ETF launch

Fidelity is a multinational financial services corporation that was established in 1946, and it remains one of the largest asset management companies in the world with $4.9 trillion AUM with a total AVN of $8.3 trillion.

According to Bloomberg analysts, the fund with FBTC CN is currently pending listing on the Canadian exchange and will be trading under the name Fidelity Advantage Bitcoin. Balchunas also notes that the new fund might possibly become the biggest asset management company that includes Bitcoin products.

Spot ETF as main advantage

While futures-backed Bitcoin ETFs are not something new for the market, the physically-backed exchange-traded fund would actually be a more convenient solution for Canadian investors who are willing to receive exposure to the cryptocurrency market and Bitcoin specifically.

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Compared to futures-backed funds, physical settlement Bitcoin products allow investors to receive direct exposure to the cryptocurrency market without facing high roll costs. Since Bitcoin-tracking funds utilize short-term one-month futures, they have to renew their contracts every month, which puts investors in an unfavorable position.

Due to funds operating with large volumes, the futures market faces significant buying power that puts futures contracts prices higher than the actual underlying asset. Such a market condition is called contango bleed when investors have to overpay for opening new positions on the market, which puts them at around a 20% annual loss.

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About the author

Arman Shirinyan is a trader, crypto enthusiast and SMM expert with more than four years of experience.

Arman strongly believes that cryptocurrencies and the blockchain will be of constant use in the future. Currently, he focuses on news, articles with deep analysis of crypto projects and technical analysis of cryptocurrency trading pairs.