It’s been a few weeks now that spot bitcoin exchange-traded products (ETPs) have been available to investors. In that time, spot bitcoin ETPs have quickly gathered assets, but one early standout has been FBTC, the Fidelity® Wise Origin® Bitcoin Fund. Competing closely for second place in the AUM rankings, the strategy’s success bears a closer look as more investors consider the merits of adding bitcoin exposure.
See more: “Fidelity Investments Launches Spot Bitcoin ETP“
FBTC currently holds more than $3 billion in AUM as of February 5th, according to VettaFi’s ETF Database. It has done so relatively quickly, having launched on January 11th, less than a month ago. That places it well above the majority of spot bitcoin ETP strategies that have less than $1 billion in AUM.
So, why has FBTC done so well compared to its rivals in the space? For one, investors have likely taken notice of the strategy waiving its initial fee to start.¹
Spot Bitcoin ETF FBTC
A big leap in AUM of more than $900 million on January 23rd suggests a potentially significant effort from the ETF’s distribution team, with its ground game securing that big jump in assets. One factor that deserves a mention, however, is Fidelity’s success with its existing crypto-related ETF, the Fidelity Crypto Industry and Digital Payments ETF (FDIG). FDIG has returned more than 50% between November 6th and February 6th, per YCharts.
That may speak to the firm’s expertise in the space, drawing in investors looking for firms with established crypto experience. In fact, FBTC’s bitcoin is custodied with Fidelity Digital Assets LLC, a dedicated business developed by Fidelity after seeing demand from its clients. Fidelity began researching bitcoin and developing blockchain solutions in 2014. It has rolled out crypto investing solutions for individual and institutional investors in recent years.
FBTC, then, remains an intriguing option for investors looking to add exposure to bitcoin to their portfolios in the weeks and months ahead.
For more news, information, and strategy, visit the ETF Investing Channel.
1) Fidelity Investments is waiving the fee to invest in FBTC. Starting August 1, 2024, Fidelity will begin charging an expense ratio of 25 basis points.
Disclosure Information
The Fidelity® Wise Origin® Bitcoin Fund material must be preceded or accompanied by a prospectus. Before investing you should carefully consider the Fund’s investment objectives, risks, charges and expenses.
FBTC is not an investment company registered under the Investment Company Act of 1940 (the “1940 Act”) and is not subject to regulation under the Commodity Exchange Act of 1936 (the “CEA”). As a result, shareholders of FBTC do not have the protections associated with ownership of shares in an investment company registered under the 1940 Act or the protections afforded by the CEA.
Digital assets are highly volatile, and their market movements are very difficult to predict. Various market forces may impact their value including, but not limited to, supply and demand, investors’ faith and their willingness to purchase it using traditional currencies, investors’ expectations with respect to the rate of inflation, interest rates, currency exchange rates, an evolving legislative and regulatory environment in the U.S. and abroad, and other economic trends. Investors also face other risks, including significant and negative price swings, flash crashes, and fraud and cybersecurity risks. Digital assets may also be more susceptible to market manipulation than securities.
Additional Information
The performance of FBTC will not reflect the specific return an investor would realize if the investor actually purchased bitcoin. Investors in FBTC will not have any rights that bitcoin holders have and will not have the right to receive any redemption proceeds in bitcoin.
Fidelity Investments® is an independent company, unaffiliated with VettaFi. There is no form of legal partnership, agency affiliation, or similar relationship between VettaFi and Fidelity Investments. Nor is such a relationship created or implied by the information herein. Fidelity Investments has not been involved with the preparation of the content supplied by VettaFi and does not guarantee, or assume any responsibility for its content.
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