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The company’s move to introduce a spot Bitcoin ETF in Canada comes after the Securities Exchange Commission in the United States took too long to give a nod to a tedious debate on Spot Bitcoin ETF.
Boston-based American multinational financial services corporation Fidelity Investments is ready to launch its first-ever Bitcoin exchange-traded fund (ETF) in Canada this week.
According to Bloomberg’s senior ETF analysts, Fidelity’s ETF is called the Fidelity Advantage Bitcoin. The ETF will be able to physically acquire Bitcoin, which means the process of obtaining it through derivates won’t be necessary.
Even though the world has seen many futures-backed ETFs in the market, the Fidelity Advantage Bitcoin, with its physically supported exchange-traded fund would be a pivotal asset for Canadian crypto investors and enthusiasts. This will also provide more exposure to the customer base of Fidelity in Canada, while conditions in the company’s native country turn a bit hostile due to regulatory proceedings.
A couple of days ago, Fidelity was approved to launch the country’s first BTC institutional solution. The company’s move to introduce a spot Bitcoin ETF in Canada comes after the Securities Exchange Commission (SEC) in the United States took too long to give a nod to a tedious debate on Spot Bitcoin ETF. While one of the largest companies in the world hasn’t been able to inaugurate the ETF in its own country, it has proven to execute its ideas in another neighboring nation.
Canada has had its fair share of Bitcoin ETF products before too. In a report earlier this year, its first-ever such product collected more than $400 Million in assets in only two days since its launch. The Purpose Bitcoin ETF began trading on February 18, 2021, with the ticker symbol BTCC. In two days of trading on the Toronto Stock Exchange (TSX), it was able to collect $421 million in assets.
Some other companies that have inaugurated their native spot BTC ETF include Galaxy Digital. The launch was led by Michael Novogratz and CI GAM.
Like Fidelity’s ETF, physical settlement Bitcoin products enable investors to enjoy immediate exposure to the cryptocurrency markets without enduring expensive roll costs. With larger amounts of funds functioning with higher volumes, the futures market is witnessing substantial trading (purchasing) power of the customers. This has led to the futures contract rates going higher than their actual underlying asset. Contango bleed is a term given to a situation like this. Contango is a scenario wherein the futures price of a commodity is above the spot price, and the investors have to pay more for starting new positions on the market. The Contango bleed situation can lead to large losses (around 20% loss annually).
The company was established in 1946 as a financial services firm and has been able to retain its position as one of the largest asset management corporations around the globe. The company presently manages assets worth $4.9 Trillion with a total AVN of $8.3 Trillion.