Fidelity President Files For New Bitcoin Fund

[el kaka22]

If we ever see places like JP Morgan or Chase and so forth starting one bitcoin or generally just a crypto fund, it will actually be a huge news because they will not get in with few hundred million dollars, if they get in they will probably do it in tens of billions of dollars and that would be insane. In these days investing 100 million dollars even on market price increases it like 1% so it is not a big deal, the change in bitcoin spread daily is bigger than the amount these guys are putting in which is why it doesn't create a lot of news.

However when you invest like 10 billion dollars that is 10%+ increase just from that purchase, which is why I believe wall street still has some time but when they do end up getting in together this is going to be a crazy time for all of us.

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[Karartma1]

If those are the numbers: where are they buying? On Huobi?

Lol I wouldn’t say such an institution as big as that and also in the US will be making use of Huobi. If they are to be making use of any of the Exchanges we know it’s probably going to be Coinbase or Bakkt.

Why I said Coinbase is because Coinbase is a regulated cryptocurrency exchange and is also like one of the biggest exchanges in the world (if not the biggest), and also in the US. Then as for Bakkt, we all already know that is the purpose it was created for, I wouldn’t be surprised if that’s what they are using.

Of course there was sarcasm in the above statement of mine.
Any institution willing to have a chance to pass any even more remotely bland KYC/AML requirement will have to head to well regulated, legacy exchange.

I think the recent action against BitMex is going to reinforce that, shifting the weight toward more traditional, law-abiding, exchanges.

That was inevitable: I guess it is the double-edged sword which is upon the bitcoin future. On one side you will always have the libertarian bitcoin world which will stick to the (merkle) roots for as long as possible. On the other side you have financial incumbents and institutions that were not able to destroy bitcoin (it's impossible) but slowly preferred to blend in and get a piece of the cake. This second world based on KYC/AML, FATF guidelines and such will only talk to those vetted exchanges and institution.
My question is can these worlds live together or there will be a major clash at some point? This question is making me mad.

[fillippone]

Earlier Today Fidelity Digital, published

BITCOIN INVESTMENT THESIS: BITCOIN'S ROLE AS AN ALTERNATIVE INVESTMENT

In the second part of our "Bitcoin Investment Thesis" series, Bitcoin's Role as an Alternative Investment, we examine bitcoin's ability to provide optimization benefits in a portfolio. In our Institutional Digital Asset Survey earlier this year, we found that almost 60% of the investors surveyed who think digital assets have a place in a portfolio believe a bitcoin investment should be funded from the alternative asset segment of their portfolio. In this piece, we focus on this insight from our survey and discuss:

• Investors’ rationale for including alternative investments in a portfolio
• The growth in appetite for alternative investments 
• The characteristics of bitcoin that may make it a sustainable portfolio diversifier 
• Historical analysis of bitcoin’s impact on a portfolio

They provide a series of rationale too keep investing in bitcoin:

The rationale of certain bitcoin holders for allocating to bitcoin is similar to their rationale for allocating to alternative investments—notably, portfolio diversification and return enhancement,” reads the report. “Additionally, the interest in bitcoin and other non-yield-generating alternative investments could also increase in response to the Federal Reserve (and many other central banks) cutting their benchmark interest rate to zero (or below zero) this year. In a world where benchmark interest rates globally are near, at, or below zero, the opportunity cost of not allocating to bitcoin is higher.”

They go even further recommending keeping 5% of value in a multi-asset portfolio in Bitcoin as a means to reap greater returns over time regardless of market conditions.

[cryptoboss2020]

Earlier Today Fidelity Digital, published

BITCOIN INVESTMENT THESIS: BITCOIN'S ROLE AS AN ALTERNATIVE INVESTMENT

In the second part of our "Bitcoin Investment Thesis" series, Bitcoin's Role as an Alternative Investment, we examine bitcoin's ability to provide optimization benefits in a portfolio. In our Institutional Digital Asset Survey earlier this year, we found that almost 60% of the investors surveyed who think digital assets have a place in a portfolio believe a bitcoin investment should be funded from the alternative asset segment of their portfolio. In this piece, we focus on this insight from our survey and discuss:

• Investors’ rationale for including alternative investments in a portfolio
• The growth in appetite for alternative investments 
• The characteristics of bitcoin that may make it a sustainable portfolio diversifier 
• Historical analysis of bitcoin’s impact on a portfolio

They provide a series of rationale too keep investing in bitcoin:

The rationale of certain bitcoin holders for allocating to bitcoin is similar to their rationale for allocating to alternative investments—notably, portfolio diversification and return enhancement,” reads the report. “Additionally, the interest in bitcoin and other non-yield-generating alternative investments could also increase in response to the Federal Reserve (and many other central banks) cutting their benchmark interest rate to zero (or below zero) this year. In a world where benchmark interest rates globally are near, at, or below zero, the opportunity cost of not allocating to bitcoin is higher.”

They go even further recommending keeping 5% of value in a multi-asset portfolio in Bitcoin as a means to reap greater returns over time regardless of market conditions.

fidelity is providing investment service for average person in usa as far i can undestood wich is not so good as i would be more happy if the investors would be private funds  in this case yes there might be bull run but yes....i still have doubts

[NotATether]

If we ever see places like JP Morgan or Chase and so forth starting one bitcoin or generally just a crypto fund, it will actually be a huge news because they will not get in with few hundred million dollars, if they get in they will probably do it in tens of billions of dollars and that would be insane. In these days investing 100 million dollars even on market price increases it like 1% so it is not a big deal, the change in bitcoin spread daily is bigger than the amount these guys are putting in which is why it doesn't create a lot of news.

However when you invest like 10 billion dollars that is 10%+ increase just from that purchase, which is why I believe wall street still has some time but when they do end up getting in together this is going to be a crazy time for all of us.

Investors are limited to purchasing from the trading volume of bitcoin (or possibly a higher amount?), you can't determine the maximum amount of bitcoin they can buy from its market cap because a large percentage of bitcoins are not for sale and locked away in cold storage.

The trading volume of bitcoin according to Coingecko is $13 billion, that must be why institutional investors are limited to backing their funds with hundreds of millions worth of bitcoin. Which leads me to think that it isn't feasible for a fund to pump the bitcoin price by itself because it would never be able to secure $13 billion of bitcoin from a single exchange. They'd have to buy up lots of bitcoin from several dozen exchanges and regulatory channels exchanges place will inhibit funds from buying more than a few hundred thousand $'s worth of of BTC.

@fillippone, do you know from which vendor Fidelity bought its bitcoins from, and how much they're buying? If we know how much bitcoin is backing their fund it'll give us good idea of how much liquidity it has.

[fillippone]

<...>

@fillippone, do you know from which vendor Fidelity bought its bitcoins from, and how much they're buying? If we know how much bitcoin is backing their fund it'll give us good idea of how much liquidity it has.

Sorry, I don't know this Information (yet).
I strongly believe that when their fund(s) will be operational they will heavily rely on OTC desks at major exchanges as not to disrupt order books. Of course they will operate, for security and compliance reasons, with a variety of exchanges. I guess, from most advanced legislations. I cannot see them using BitMex or Huobi for their trade.

[el kaka22]

Investors are limited to purchasing from the trading volume of bitcoin (or possibly a higher amount?), you can't determine the maximum amount of bitcoin they can buy from its market cap because a large percentage of bitcoins are not for sale and locked away in cold storage.

The trading volume of bitcoin according to Coingecko is $13 billion, that must be why institutional investors are limited to backing their funds with hundreds of millions worth of bitcoin. Which leads me to think that it isn't feasible for a fund to pump the bitcoin price by itself because it would never be able to secure $13 billion of bitcoin from a single exchange. They'd have to buy up lots of bitcoin from several dozen exchanges and regulatory channels exchanges place will inhibit funds from buying more than a few hundred thousand $'s worth of of BTC.

I would assume that if they ever want to buy 13 billion dollars worth of bitcoin, they could do it OTC and they wouldn't really have trouble with it. Sure they may not get it at one place, but for example if a huge company wants to find 13 billion dollars worth of bitcoin somewhere, they could track down who has the most bitcoins and mainly that is the exchanges themselves and not the users of those exchanges.

So, if you want 13 billion dollars worth of bitcoin, you contact bitfinex, bittrex, poloniex, kucoin and mainly binance when you combine all the bitcoins they have you can definitely get a lot of bitcoin from them, include couple of big whales in there as well and you got yourself 13 billion dollars for sure. Obviously on a market where the volume is 13 billion, you will increase the price a bit but at least you can do it all on OTC.

[fillippone]

Fidelity is paving the way for their involvment in the Bitcoin industry with an educational effort:

ADDRESSING PERSISTING BITCOIN CRITICISMS

In this article Ria Bhutoria, Director of Research at Fidelity Digital Assets tries to review some criticism and provide a few answers.

In this piece, we review and respond to criticisms and misconceptions that continue to come up in our conversations. The criticisms outlined below have been addressed many times over, but we wanted to share an updated response given the increase in attention on Bitcoin. Specifically:

• Bitcoin is too volatile to be a store of value.
• Bitcoin has failed as a means of payment.
• Bitcoin is wasteful.
• Bitcoin is used for illicit activity.
• Bitcoin is not backed by anything.
• Bitcoin will be replaced by a competitor.

[NotATether]

In this article Ria Bhutoria, Director of Research at Fidelity Digital Assets tries to review some criticism and provide a few answers.

Since volatility is mentioned in that article, I'll point out that its 9 day volatility hasn't changed much since Jan 2012, according to their chart. Not that people are very concerned about that though, they seem to be more concerned about 3 day volatility since it can wreck swing trades that only last for a week or two.

[fillippone]

Fidelity might not have launched a Bitcoin Fund yet, but apparently Bitcoin is well integrated on their Strategies:


Fidelity Digital to Hold Bitcoin as Collateral for Cash Loans

Fidelity Digital Assets will allow its institutional customers to pledge Bitcoin as collateral against cash loans in a partnership with blockchain startup BlockFi.

The unit of Boston-based asset manager Fidelity Investments will hold the digital asset and not make loans itself, Tom Jessop, president of Fidelity Digital Assets, said in an interview. The target is Bitcoin investors who want to turn their digital stash into cash without selling, and potential customers include hedge funds, crypto miners and over-the-counter trading desks, Jessop said.

Apparently the deal is limited to institutional investors for the moment, but the idea makes sense:

• Give your Bitcoins to fidelity as loan collateral
• Obtain a USD Cash Loan
• Use the cash
• BTC moons
• Use a fraction of your collateral Bitcoins to repay back the loan.

"Bad money drives out good": Hodl your Bitcoins, Spend USD.

[Karartma1]

For those who are fortunate enough to have, let's say, more than 10BTC I trust that strategy makes complete sense. I'd rather do that than cash out and create a taxable event.
When even the big guys will feel confident doing it the moon is getting very near.

[fillippone]

For those who are fortunate enough to have, let's say, more than 10BTC I trust that strategy makes complete sense. I'd rather do that than cash out and create a taxable event.
When even the big guys will feel confident doing it the moon is getting very near.

I don't exactly know what a taxable event is, and I suspect it greatly varies between jurisdictions, but of course avoiding such events is a very common condition for this kind of schemes (Grayscale's success, for example, is greatly helped by the fact that interaction don't constitute a taxable event).

[Daltonik]

Anyway, Fidelity International has received the listing of its first bitcoin exchange product on two european exchanges at Deutsche Börse in Frankfurt and SIX Swiss Exchange in Zurich. Fidelity physical bitcoin ETP under the FBTC ticker, it tracks the price of bitcoin and is available to professional clients of Fidelity International in Europe. Fidelity's digital assets will act as a custodian of the product.

Fidelity International debuts Bitcoin ETP in Europe

[fillippone]

Anyway, Fidelity International has received the listing of its first bitcoin exchange product on two european exchanges at Deutsche Börse in Frankfurt and SIX Swiss Exchange in Zurich. Fidelity physical bitcoin ETP under the FBTC ticker, it tracks the price of bitcoin and is available to professional clients of Fidelity International in Europe. Fidelity's digital assets will act as a custodian of the product.

Fidelity International debuts Bitcoin ETP in Europe

Lol, my friend. When I saw the news today I immediately thought I should open a thread on this. But as I was busy with my actual work I thought, well, Daltonij is going to open it  for sure!
Turns out that you know my threads better than I do!
I will surely come up with some added value later!

[fillippone]

Fidelity Wise Bitcoin Investmen Fund just gor to 125 millions, according to a report published by the FED,

Here you have a termsheet of the fund:



According to The block:

Fidelity's bitcoin index fund surpasses $125 million in investments

The Wise Origin Bitcoin Index Fund went public in August 2020, giving Boston-based Fidelity the ability to offer clients bitcoin exposure. Almost nine months later the fund had raised $102 million, according to SEC filings.
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According to its latest SEC filing, made on Monday, the fund has now raised a total of $126.5 million as of May 23, signaling a tapering in overall growth compared to the earlier reporting period. While the fund's size has grown modestly during its second year, the number of investors has increased from 83 to 689, according to the latest filing.

It might look tiny , compared to BITO, but it's catching up. Also given the terrible cost structure of the future-based  fund.