Since two years of its launch, the growth in the funds flow into the Fidelity Bitcoin Index Fund remains subdued.
Two years since Fidelity Investments launched its Bitcoin Index Fund, the financial giant released a new report. On Monday, May 23, Fidelity submitted its filing to the US Securities and Exchange Commission (SEC) saying that the fund has raised a total of $126.5 million.
The overall growth in investments remains subdued in comparison to the earlier reporting period. The regulatory filings show that Fidelity Investments has seen a drop in the in-bound investments year on year. Fidelity’s Wise Origin Bitcoin Index Fund went public for the first time in August 2020. This gave the Boston-based financial giant the ability to offer Bitcoin exposure to its clients.
But although the growth of the fund’s size remains moderate during the second year, the number of investors has surged from 83 to now at nearly 700. This is a staggering 730% increase over the last year.
Well, the latest announcement from Fidelity comes just at a time when Bitcoin has been undergoing significant correction. The Bitcoin price has corrected heavily so far in 2022 and is down by nearly 40% year-to-date.
Fidelity and Its Crypto Association
Financial giant Fidelity has been among the early players venturing into the crypto space. Four years back, the company also launched a dedicated crypto unit dubbed Fidelity Digital Assets.
Fidelity is also working on allowing investors to seek Bitcoin exposure via their 401(k) retirement savings account. Fidelity is one of the biggest financial firms handing 401(k) retirement accounts to several employers in America. This move will allow employers to let their employees choose whether they want any exposure to Bitcoin for their retirement accounts. Explaining that diversification is the key, Chris Pepper, vice-president of corporate affairs at Fidelity said:
“It is important to consider that there are investment characteristics of Bitcoin, such as relative low correlation to equities and fixed income, that have the potential to enhance diversification and dampen overall portfolio volatility”.
The larger Fidelity Group alone manages more than $4.2 trillion in total AUM. Business Intelligence firm MicroStrategy which holds a massive amount of Bitcoins on its balance sheet said that it will allow its employees to seek Bitcoin exposure via Fidelity’s 401 (k) savings account.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
