Fidelity Investments, the multinational specializing in third-party asset management, plans to launch a new product. The company led by Abigail Johnson has reportedly made a filing with the United States Securities and Exchange Commission (SEC) for the launch of the Fidelity Ethereum Index Fund. The structure is not at its first attempt, since a few years ago, it was a bitcoin-based fund that was taking shape. Note that this ETH-focused fund has a particular structure, as it is not traded on an exchange. The mode of management is closer to a limited partnership.
The new Ethereum index fund has a particular structure
In addition to managing more than $4 trillion in assets, Fidelity Investments has also supported BTC trading activity for hedge funds for a few years. Very active in the world of cryptos, the visibly insatiable company wishes to develop its activities. It is in this movement, that it would have filed a file with the SEC on October 4th for the launch of its new product. Fidelity Ethereum Index Fund. It would be an index fund focused on Ethereum with an investment of $50,000 per title for foreign investors. A sum that did not deter investors, since the fund would have already exceeded 5 million dollars in assets.
This new Ethereum-focused fund is a bit special, given that it is not traded on an exchange. The report released by Barron’s Advisor clarifies that the bottom structure is similar to a “ traditional limited partnership “. When we talk about a Partnership, it should be known that there are associates with various implications. On the one hand, there is sponsor and on the other hand, the general partner. It is the first that provides most or all of the funds, while the second takes care of the day-to-day management of the company with important prerogatives. Clearly, the limited partners have reduced responsibilities, while the general partner bears a burden of responsibility parallel to the risks to which he is exposed.
The new fund is a response to client needs
This new fund launched by Fidelity is not a surprise, because customers were already showing this need. A few years earlier, the company had launched a bitcoin-based index fund, necessarily the clientele wanted an extension with other cryptocurrencies like Ethereum. At least that’s the sentiment shared by a representative of Fidelity: “We continued to see client demand for exposure to digital assets beyond bitcoin. “. For the record, this new fund based on ETH from Fidelity will be obtained thanks to the price feed of the king of altcoins Ethereum, from previously approved exchanges.
Fidelity, by deciding to market a new product, is establishing itself as a rising value in the crypto industry. It was in 2015 that for the first time, she invested in bitcoin. Since then, it has been considered one of the best asset management companies, and intends to remain so for a long time.
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