Fidelity offers first Bitcoin fund

Fidelity offers first Bitcoin fund
The passively managed fund will be available to qualified purchasers, with the minimum investment set at $100,000
AUG 27, 2020
By  Bloomberg

Fidelity Investments is launching its first Bitcoin fund, adding its establishment name and star power to the fledgling and often controversial asset class.

The money manager said in a filing to the Securities and Exchange Commission that it will begin to offer the Wise Origin Bitcoin Index Fund I through a new business unit called Fidelity Digital Funds. Peter Jubber, head of Fidelity Consulting, will run the new business unit, the filing shows.

The passively managed, Bitcoin-only fund will be made available to qualified purchasers through family offices, registered investment advisers and other institutions, according to a person familiar with the matter. Fidelity Digital Assets will custody the fund, the person said. The minimum investment is $100,000.

A spokeswoman for Fidelity declined to comment on the filing.

“Fidelity has made a long-term commitment to the future of blockchain technology and to making digitally native assets, such as Bitcoin, more accessible to investors,” the company said in an email.

Cryptocurrency has surged since debut

Fidelity Chief Executive Abigail Johnson is among the highest-profile Wall Street proponents of the blockchain technology that backs Bitcoin, and the firm has dabbled in the space since 2014. Two years ago, it started Fidelity Digital Assets, a unit meant to manage these products for hedge funds, family offices and trading firms.

Fidelity’s latest foray into the world of crypto is welcome news for fans who have long sought greater acceptance of digital currencies and blockchain by Wall Street mainstays. Banks have largely avoided the sector because of concern about its use in money laundering and other illicit activities.

Few other mainstream firms have ventured into the crypto-sphere though there are signs interest in crypto products could be increasing. Cryptocurrency trusts by Grayscale Investments, for instance, attracted more than $900 million in the second quarter, nearly double the previous quarterly high. The money came mostly from institutional investors and brought its total assets under management to over $4 billion.

Fidelity’s move comes at a time when the price of Bitcoin, the world’s largest cryptocurrency, has recouped much of its losses since crashing in March in the midst of a coronavirus-induced sell-off. Bitcoin is up roughly 60% this year to trade around $11,500 -- though it’s still about 40% off its all-time high reached in 2017.

Latest News

Bridgewater's flagship hedge fund surges amid volatile markets
Bridgewater's flagship hedge fund surges amid volatile markets

The firm's flagship fund, which invests in stocks, bonds, currencies, and commodities, saw accelerated gains as some peers lost ground.

ICI floats '40 Act revamp to support middle-class wealth creation
ICI floats '40 Act revamp to support middle-class wealth creation

Policy proposal offers recommendations on dual-share class funds, semi-transparent ETFs, and expanded flexibility for closed-end funds to include private market assets.

Trump-induced turbulence tests 60-40 strategy's limits
Trump-induced turbulence tests 60-40 strategy's limits

With bonds failing to provide a safety net for steeply falling stock prices, many investors are letting go of their "set it and forget it" approach.

More workers dipped into their retirement savings last year, Vanguard finds
More workers dipped into their retirement savings last year, Vanguard finds

Sneak peek into annual defined contribution plan report shows average participant balances reached an all-time high amid rising equity markets.

Decades-old will leaves fate of late actor Gene Hackman's $80M fortune uncertain
Decades-old will leaves fate of late actor Gene Hackman's $80M fortune uncertain

The iconic actor's death alongside his wife, Betsy Arakawa, leaves pressing questions about what happens next to his assets.

SPONSORED Beyond the all-in-one: Why specialization is key in wealth tech

In an industry of broad solutions, firms like intelliflo prove 'you just need tools that play well together'

SPONSORED Record growth: Interval funds emerge as key players in alternative investments

Blue Vault Alts Summit highlights the role of liquidity-focused funds in reshaping advisor strategies