Sunday 09 October 2022 ▪ 3:00 pm ▪
min read – with
Fidelity Investments, the multinational company specializing in third-party asset management, plans to launch a new product. The company led by Abigail Johnson has reportedly filed with the United States Securities and Exchange Commission (SEC) to launch the Fidelity Ethereum Index Fund. The structure is not on their first attempt, since a few years ago, it was a fund based on bitcoin that was taking shape. Note that this fund has a certain structure focused on ETH, as it is not traded on an exchange. The management method is closer to a limited partnership.
The new Ethereum index fund has a unique structure
In addition to more than managed $4 trillion in assets, Fidelity Investments also supported BTC trading activity for hedge funds for a few years. Very active in the world of cryptos, the insatiable insatiable company wants to develop its activities. It is in this movement that he would have filed a file with the SEC on October 4 to launch his new product. Fidelity Ethereum Index Fund. It would be an Ethereum-focused index fund to invest in $50,000 per title for foreign investors. An amount that did not discourage investors, since the fund would already be more than 5 million dollars in assets.
This new fund focused on Ethereum is a bit special, since it is not traded on an exchange. The report released by Councilor Barron he clarifies that the basic structure is similar to a “ traditional limited partnership “. When we talk about limited partnership, you should know that there are partners with different implications. On the one hand, yes sponsor and on the other hand, the general partner. The former provides most or all of the funds, while the latter takes care of the day-to-day management of the company with important competencies. It is clear that the limited partners have reduced responsibilities, and that the general partner has a burden of responsibility parallel to the risks he is exposed to.
The new fund is a response to client needs
This new fund launched by Fidelity is not surprising, because customers were already showing this need. A few years earlier, the company launched a a bitcoin-based index fund, the client must have wanted to extend to other cryptocurrencies like Ethereum. At least that’s the sentiment shared by a Fidelity representative: “We continued to see client demand for exposure to digital assets beyond bitcoin. “. For the record, this new ETH-based fund from Fidelity will receive 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 it plans to stay that way for a long time.
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A doctoral student in financial law and an experienced SEO web editor, Cédrick Aimé is passionate about cryptocurrencies, trading, etc. He naturally participates thanks to his articles in the daily blockchain revolution for a better democratization of DeFi.