According to the official statement in the latest document filed with the SEC, Fidelity’s Bitcoin ETF will be listed on the Cboe BZX Exchange.
Listing Bitcoin ETF on Cboe
One of the Bitcoin spot ETFs expected to be approved soon is Fidelity’s.
The Chicago Board Options Exchange (Cboe) is the largest options exchange in the United States and is naturally based in Chicago, where the Chicago Mercantile Exchange (CME) is also located.
Cboe has been in existence since 1973 and currently provides options for over 2,200 companies, 22 stock indices, and 140 ETFs.
It also offers BTC options, and once Fidelity’s request is approved, it will also offer a Bitcoin spot ETF.
In December 2017, it was the first exchange in the world to offer Bitcoin futures contracts, followed shortly by CME. However, Cboe delisted BTC futures contracts due to low demand, while CME continued.
CME specializes in futures contracts, while Cboe specializes in options. Therefore, Bitcoin futures contracts are traded on CME, while options are traded on Cboe.
Fidelity filed an application to launch the Fidelity Wise Origin Bitcoin ETF at the end of June, following a similar request from BlackRock.
In fact, Fidelity has been involved in the cryptocurrency market for a long time through its subsidiary Fidelity Digital Assets, which has been in existence since 2018. Under the same parent company, Fidelity, it is stated that they began to show interest in the blockchain world back as early as 2014.
Fidelity Investments is a US-based multinational financial services company founded in 1946 and headquartered in Boston. It is the fourth-largest mutual fund and retirement fund manager in the world.
Therefore, it is a truly historical giant of the United States and the global financial market, so it is reasonable to expect that its Bitcoin spot ETF could at least achieve considerable success.
Cboe’s choice is intriguing, but it must be said that Fidelity’s products seem to be aimed at their current customers rather than the mass market.
Bitcoin Spot ETF
There are already Bitcoin spot ETFs around the world, but in the United States, the SEC has always rejected them.
For example, in Canada, there is the Toronto Stock Exchange, just a few kilometers from the US border.
It should also be noted that there have been ETFs in the US that mimic the price of Bitcoin, but they are not backed by BTC. Instead, they are backed by Bitcoin futures contracts based on the BTC price from CME.
However, futures contracts and ETFs on futures contracts are products aimed at speculators rather than investors, while Bitcoin spot ETFs, especially those from Fidelity and BlackRock, seem to be specifically aimed at investors, especially long-term investors.
The SEC is expected to approve the launch of Bitcoin spot ETFs in the coming days, so issuers and managers are finalizing the last steps for the launch.
Impact on Price
An interesting point is that being backed by BTC, these ETFs force their managers to buy Bitcoin on the market and hold them in cold storage.
In other words, the more actions they want to take with these ETFs, the more they are forced to buy and withdraw BTC from the market effectively.
Bitcoin stored in offline cold wallets cannot be traded, so removing BTC from the market to hold them in cold storage will effectively reduce the BTC supply in the market.
Although the launch of Bitcoin ETFs may reduce the demand for BTC, it should be noted that ETFs target new audiences, specifically those who do not currently own Bitcoin and have never invested in it before.
Therefore, the demand for BTC in the market may not decrease much due to the launch of ETFs, while theoretically, the supply could decrease significantly.
There are some estimates related to this issue, with some hypotheses that in the past few years, Bitcoin spot ETFs may have attracted hundreds of billions of new capital into Bitcoin.
All of this suggests that if these derivative tools are successful, the price of Bitcoin could benefit from it.
However, it is by no means certain that they will achieve great success, and it may take some time before we can understand that.
