Key Takeaways:
- Rumors of Fidelity acquiring Grayscale persist.
- Why is the financial giant interested in the Bitcoin fund and a possible Spot ETF?
- The FOMO has spurred whale accumulation.
YEREVAN (CoinChapter.com) — According to rumors from “foreign sources,” American financial services corporation Fidelity Management plans to acquire Grayscale, the world’s largest digital asset management company with over $20 billion in assets.
Why would Fidelity have its eye on Grayscale?
Grayscale allows customers to dab into crypto assets through exchange-traded funds (ETFs) and Trusts. The digital asset manager currently offers services for several cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), Solana (SOL), Chainlink (LINK), Decentraland (MANA), etc.
However, Grayscale’s Bitcoin ETF is the main milking cow, in charge of $16 billion, or 80% of the total assets under management.
Notably, the company offers Bitcoin Futures ETF, not Spot ETF. The US Securities and Exchange Commission (SEC) has not yet greenlighted any company to open a Bitcoin Spot ETF within the US.
Grayscale applied for one in March 2022, getting a rejection. The SEC rejected Fidelity’s plea for a Bitcoin Spot ETF in January 2022. Will the financial giant file again? Investors would have to wait for rumor confirmations.
What’s in it for Fidelity?
Grayscale claims that its Bitcoin Trust is “solely and passively invested in BTC, enabling investors to gain exposure to BTC in the form of security while avoiding the challenges of buying, storing, and safekeeping BTC directly,” boasting regulatory clarity.
Meanwhile, Digital Currency Group (DCG), Grayscale’s parent company, and the Bitcoin Trust are the largest Bitcoin holders in the world after creator Satoshi Nakamoto, making them the most influential players on the market.
DCG mega-company has been around since 2013 and owns not only Grayscale, but Coindesk, the largest crypto publication, the now insolvent crypto lender Genesis, and bankrupt exchange Gemini. Due to the tough year, Grayscale’s AUM has shrunk from $50 billion in 2021 to $20 billion in 2023.
Thus, the distressed giant is a tidbit for any corporation with a crypto appetite.
Fidelity’s crypto exposure has been indirect so far
Fidelity has doubled down on Bitcoin-related stocks since the start of the year. The corporation is now the third-largest MicroStrategy stock owner, increasing its exposure by over 650% year-to-date. Fidelity now boasts over 700,000 shares worth $293 each, ahead of the June 19 session.
Business intelligence firm MicroStrategy is famously one of the largest Bitcoin holders on the market with 140,000 BTC, approximately 0.7% of the total amount of Bitcoins that will ever be created. Thus, holding MSTR stock and Grayscale simultaneously would ensure Fidelity’s tight grip on the crypto market.
NOTE: The news of Fidelity acquiring Grayscale is not yet confirmed or denied by either representative.
Are BTC whales in action mode?
While the altcoin market has suffered from the persisting regulatory crackdown, Bitcoin remains primed to benefit from its status clarity. Thus, the ongoing whale accumulation should come as no surprise. According to on-chain data provider Glassnode, large Bitcoin investors have been hogging more BTC coins since mid-May.
Accumulation Trend Score persists, as the largest of Whales (>10K BTC) continue to aggressively accumulate, whilst all other major cohorts experience heavy distribution.
tweeted the platform in early June.
Typically, the dissonance between whales and smaller fish tends to diminish. In detail, once whale accumulation persists, retail investors follow the large players’ lead, assuming they have more resources, hence, more accurate information.
Also read: Does buying Grayscale Bitcoin Trust (GBTC) make more sense than BTC?
The regulatory troubles have played out in Bitcoin’s favor. However, the growing fiat interest in the sector is not devoid of irony. Small retail investors could have seen the BTC market as a way of gaining independence from “Big Brother.”
However, if rumors of Fidelity acquiring Grayscale are true, BTC decentralization will remain a myth.
