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Fidelity All-in-one ETF Allocates Up To 3% In Bitcoin As Institutional Crypto Investing Normalized

Last Updated February 8, 2024 12:08 PM
Teuta Franjkovic
Last Updated February 8, 2024 12:08 PM

Key Takeaways

  • Fidelity Canada adds Bitcoin to “All-in-One” funds, even their balanced ETF.
  • The new Canadian Bitcoin ETF is already among the world’s largest.
  • The market has absorbed liquidated BTC with fresh interest from FBTC, IBIT, ARKB, and BITB, boosting overall exposure.

Fidelity Investments Canada has incorporated a 1-3% Bitcoin allocation into its “All-in-One” asset allocation funds, which include spot Bitcoin ETFs.

This development represents a low-cost solution that adheres to an integrated strategic asset allocation model and consistent portfolio rebalancing, underscoring Fidelity’s innovative approach to investment in Canada.

Fidelity Adds Bitcoin to Balanced ETF, Sparks Bullish Rally

The strategic allocation  of the Fidelity All-in-One Conservative ETF  (FCNS) is designed to offer a balanced investment approach with a mix of approximately 40% equities and 59% fixed-income ETFs, now with an added 1% in cryptocurrencies.

Eric Balchunas, an ETF analyst, remarked  on the significance of this inclusion in a conservative fund, suggesting it reflects a positive outlook on Bitcoin.

Fidelity Investments Canada operates as the Canadian arm of the global financial giant Fidelity, catering to the Canadian market by offering tailored services to its residents. The decision by Fidelity to dedicate a portion of its conservative ETF, such as FCNS, to Bitcoin, demonstrates the firm’s confidence in the digital currency as a viable asset class.

Fidelity’s FBTC ETF Holds 3,700 BTC, Marking Major Crypto Push

This move involves the Canadian version of Fidelity’s Bitcoin ETF, known as the Fidelity Advantage Bitcoin ETF , which trades under the ticker FBTC on the Toronto Stock Exchange. This particular ETF, distinct from its American counterpart, holds about 3,700 BTC, marking a significant foray into the cryptocurrency space within the Canadian financial landscape.

The inclusion of Bitcoin in a conservative investment vehicle  like FCNS, although confined to the Canadian market, may well indicate broader trends and potential shifts in the larger U.S. market. This initiative mirrors the growing acceptance of Bitcoin spot ETFs in financial strategies.

The timing of the announcement concerning FCNS’s Bitcoin allocation coincided with a noticeable uptick in Bitcoin’s price, which surged to $43,500 shortly after the news broke, eventually climbing above $44,000.

Fidelity’s FBTC Rapidly Ascends as a Leading Bitcoin ETF

The Fidelity Wise Origin Bitcoin Fund ETF (FBTC) made its debut  on the New York Stock Exchange (NYSE) on January 11th and has swiftly risen to prominence in the cryptocurrency investment sphere. In under a month, FBTC has amassed  more than 63,000 BTC, positioning it as the third largest Bitcoin ETF globally, trailing only behind BlackRock’s IBIT and the well-established Grayscale Bitcoin Trust (GBTC).

Remarkably, during this period, GBTC underwent a significant reduction, liquidating around 150,000 BTC. However, the introduction of FBTC and IBIT has nearly offset this outflow, collectively absorbing almost 140,000 BTC. Additionally, the market saw the entrance of two more Bitcoin ETFs, ARKB by Ark Invest and BITB by Bitwise, which together accounted for another 31,000 BTC acquisitions. This means the newly launched ETFs have compensated for Grayscale’s liquidated holdings and expanded the market’s overall Bitcoin investment.

While Grayscale’s ETF also transitioned to the stock exchange on the same day as FBTC, its inception dates back to 2013 as a non-exchange-tradable fund. The immediate success of Fidelity’s FBTC and BlackRock’s IBIT, outpacing the previously largest BTCC by Purpose in BTC holdings, underscores the significant impact and investor confidence in these new entrants to the Bitcoin ETF market.

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