Fidelity announces $5 million index fund for Ethereum

  • Fidelity announces a $5 million fund to track the cryptocurrency Ethereum.
  • The company is in charge of managing $4.5 trillion worth of assets.

Documents filed today with the U.S. Securities and Exchange Commission show that Fidelity has already put $5 million into a new Ethereum index fund.

The asset manager, which is in charge of $4.5 trillion, registered its Fidelity Ethereum Index Fund on Tuesday, but it said in its SEC filing that the first sale took place on September 26.

Last month, it was said that Fidelity was thinking about letting its more than 34 million retail customers trade Bitcoin, but the news didn’t come directly from Fidelity. At the SALT forum in New York, Galaxy Digital CEO Mike Novogratz let the cat out of the bag.

“A bird told me, a little bird in my ear, told me Fidelity is going to shift its retail customers into crypto soon enough,” he said at the event. “I hope that bird knows what’s up.”

Fidelity has also been hard at work on EDX Markets, which is an exchange for cryptocurrency. The company formed a consortium with Charles Schwab, Citadel Securities, and other backers in the hopes that the new exchange will “make trading digital assets more efficient, secure, and cost-effective,” as a Fidelity spokesperson told Decrypt in an email last month.

The new Fidelity Ethereum Index Fund joins a group of well-known Ethereum funds that is getting bigger.

Bitwise, a company that manages $1 billion worth of assets, told the SEC in September that its Ethereum Fund was in charge of $25 million worth of assets. The Ethereum index fund from Bitwise has been around for a lot longer. The San Francisco company started it in 2018.

How they’re traded is the main difference between index funds like those from Fidelity and Bitwise and exchange-traded funds (ETFs) like the Grayscale Ethereum Trust (ETHE). Index funds, like the new one from Fidelity, can only be bought at set prices and after the markets have closed.

Index funds usually have higher minimums, but the new Fidelity fund’s $50,000 minimum and the $25,000 minimums at ETHE and Bitwise put them out of reach for most retail investors. This is especially true since all of these Ethereum funds are only for accredited investors.

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