Fidelity joins the crypto hunt
Fidelity has launched a bitcoin ETF in Germany, becoming the latest asset management giant to join crypto.
The Fidelity Physical Bitcoin ETP (FBTC), which listed in Frankfurt,
It is built the same way as all the other physical bitcoin ETFs. It holds the bitcoins in cold storage—in this case, Fidelity will also be the custodian, via its Fidelity Digital Assets subsidiary. The ETFs then give an entitlement to the coin.
FBTC charges 0.75%, making it equal cheapest in Europe with SEBA Bank's Bitcoin Tracker Certificate USD (SBTCU).
Fidelity plans to launch the fund on other exchanges, including SIX, later this month.
Bernie’s commentary – there’s a lot to say
There’s a lot to say about this launch. In no particular order:
- Fidelity has claimed that they have launched this in response to overwhelming client demand. But asset managers’ PR people always claim launches are a response to client demand. So my guess is they just smell the money, like everyone else.
- Fidelity chose to price-match SEBA rather than undercut. I’m not sure why they’ve done this. They own the custodian so presumably there are less supply chain costs for them than some of their competitors.
- Relatedly, I think there is great opportunity for bitcoin custodians in the ETF industry. Given the prevalence of hack attacks in crypto, custody is one area that asset managers may be willing to pay more get more. It’s also growing very quickly. I have noticed a few former ETF people move over to crypto custodians.
- I’m losing count of the number of bitcoin ETFs we’ve had launched in Europe the past 12 months. Now it’s every man and his dog. My gut feel is that entrants at this very late stage need to offer something genuinely different.
- You may have noticed that the image associated with this article is not related, i have run out of relevant images for crypto, from now on any new crypto products are just going to include images I find amusing.