Fidelity reveals $5 million Ethereum index fund

Fidelity has already invested $5 million in a new Ethereum index fund, according to registration documents filed today with the U.S. Securities and Exchange Commission.

The asset manager, which has $4.5 trillion on its books, registered its Fidelity Ethereum Index fund on Tuesday, but said in its SEC filing that the first sale took place on September 26.

Last month, Fidelity reportedly considered offering bitcoin trading to its more than 34 million retail customers, although the news did not come directly from Fidelity. Galaxy Digital CEO Mike Novogratz spilled the wick at the SALT forum in New York.

“A bird told me, a little bird in my ear, told me that Fidelity was going to transition its retail customers to crypto soon enough,” he said at the event. “I hope that bird is right.”

Fidelity has also been busy working on a crypto exchange, EDX Markets. The company has teamed up with Charles Schwab, Citadel Securities and other backers to form a consortium in hopes that the new exchange will “facilitate a more efficient, secure and profitable process for trading digital assets”, said a Fidelity spokesperson. Decrypt in an email last month.

The new Fidelity Ethereum Index Fund is stepping into an increasingly crowded realm with other leading Ethereum funds.

As recently as September, asset manager Bitwise – with $1 billion under its belt – said in a Filing with the SEC that his Ethereum fund had $25 million in assets under management. Bitwise’s Ethereum index fund has been around for much longer, launched by the San Francisco company in 2018.

The main difference between index funds, like Fidelity and Bitwise, and exchange-traded funds (ETFs), like the Grayscale Ethereum Trust (ETHE), is how they are traded. Index funds, like Fidelity’s new offering, can only be purchased after markets close and at fixed rates.

ETFs can be bought and sold throughout the day like stocks. There is also the question of the minimum investment required to participate.

Index funds tend to have a higher minimum, although the $50,000 minimum on the new Fidelity fund and the $25,000 minimum at ETHE and Bitwise put them largely out of reach for retail investors, especially more than all these Ethereum funds are also restricted to accredited investors.

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About Meredith Campagna

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