Fidelity is offering a new investment product that allows high-net-worth clients to gain exposure to the price of Ether.
Fidelity has announced that it is expanding its offering of cryptocurrency-based products to its clients. In this case, the Boston-based financial firm has launched a Ethereum index fund.
The fund was announced during a presentation before the United States Securities and Exchange Commission (SEC) that took place last Tuesday.
Since sales began on September 26, the fund has already raised 5 million. In this regard, the documents presented by Fidelity indicate that the entire investment comes from a single client, whose identity has not been revealed.
The new index fund of Fidelity Ethereum It is intended for high net worth clients, since you can only participate with a initial investment of $50.000.
Cryptocurrency index funds are They manage passively and follow the performance of an assetFor example, Grayscale's Bitcoin Trust is tied to the price of Bitcoin, while Fidelity's new product tracks the performance of Ether.
Fidelity is one of the traditional investment firms that was earliest to take an interest in cryptocurrencies. The company created Wise Origin Bitcoin Fund in 2020, although she has been immersed in the crypto world since 2018.
Why does Fidelity link its product to the price of Ether?
With the arrival of The Merge on Ethereum, the blockchain switched to using a validator node-based Proof-of-Stake consensus mechanism, instead of mining. This has led to a 99% reduction in Ethereum electricity consumption.
This change in the consensus mechanism has caused the Major institutional players are eyeing the Ethereum blockchainInstitutions and large corporations have avoided exposing themselves to Proof-of-Work blockchains due to criticism from environmental associations about their high energy consumption.
In fact, Fidelity has been studying for some time the possibility of creating a service for institutional investors to buy, trade and sell ETH from custody from its platform. On the other hand, it could also implement a Bitcoin buying and selling service for retail customers.
In 2021, Fidelity conducted a study in which he explains that most institutional and retail clients want some type of product or service that offers them exposure to cryptocurrencies.
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