Race for the first U.S. Bitcoin ETF

Yahoo Finance’s Zack Guzman, Julie Hyman and Brian Sozzi discuss Fidelity building upon its digital asset business.

Video Transcript

JULIE HYMAN: Speaking of new entrants in the market, we could see some more Bitcoin ETFs coming. There's a report this morning that Fidelity is looking into a Bitcoin ETF. We got a special guest right now, Zack Guzman, who normally helms, and still is helming today, the next couple of hours of programming. He also tracks these cryptocurrencies for us.

So Zack, it's my understanding that in various places of the world, there are some Bitcoin ETFs. And Fidelity would not be the first that has applied for approval here in the US, but certainly the biggest and one of the best known passive names, of course, that's looking at this kind of a move.

ZACK GUZMAN: Yeah, and I think that's why this one is important, Julie, because you're right. I mean, we've seen plenty of filings here to apply for a Bitcoin ETF that have gone nowhere, including from the ever famous Winklevoss Twins themselves, VanEck also one of those first to file for a Bitcoin ETF here in the US.

But we have seen those come through in other parts of the country. To your point, the Purpose Bitcoin ETF up in Canada came through last month. We've seen another competitor launch there too, which actually cut their management fees, so a bit of a battle between those two attract some capital.

But the Fidelity one is important, to your point, because it is one of those names that is comfortable with institutional investors, with a lot of bigger money investors out there relative to some of the platforms that have set up things to trade around Bitcoin, like the Grayscale Bitcoin Trust we've been talking about here in the US. It has actually dipped. It used to trade at a premium.

That's why we heard people who were comfortable with crypto, like Mike Novogratz, who you've had on your show, talking about why that's bad for consumers, because it's not the same as a Bitcoin ETF, where it's settled in Bitcoin and trades exactly in line with the price, which is why something like that being offered by a Fidelity would be a big step in that direction to more accurately capture the correct pricing structure for investors out there, since it would be Fidelity in charge of their own custody of that.

The Wise Origin ETF would custody that in Bitcoin controlled by Fidelity. So it would be big if it comes through. But again, we haven't seen any approved by the SEC here in the US. This is a first step forward. That's why it's big news now. But we'll see what happens once Gary Gensler gets in there at the SEC and sets up his team to go to work on maybe approving one of these things.

BRIAN SOZZI: Zack, is this the ultimate sign, Fidelity coming out here? Is this the ultimate sign of credibility for Bitcoin? Sure, it's cute to have Elon Musk out there buying Bitcoin for his corporate balance sheet at Tesla, sure. But it's Fidelity. I mean, they're a major player.

ZACK GUZMAN: Yeah, I mean, they are. And obviously, they carry size and favor that cannot be matched by some of these other players in this space. But I think that there is kind of that sea change that we were talking about with the Tesla move and a Square move putting it on their balance sheet. But we haven't necessarily seen any other big name companies.

There was a bit of a time gap there, right, when we were thinking about all right who's going to be the next one. We didn't get any major moves on that front. And I think we're kind of in this weird stalled period, where we're waiting for either something next to be that catalyst here, or whether or not one of these Bitcoin ETFs finally gets approved.

And if it does come through via Fidelity being the one that does get approved, I think that might raise questions, actually, within the crypto community about why they're the ones who might be able to get it, whereas we've seen plenty of other filings from lesser known firms trying to do exactly the same thing.

But we'll see how it goes. We'll be tracking it. And of course, investors interested in accessing an ETF already have that option with the Purpose Bitcoin ETF up in Canada also available to trade through accounts brokerages, like Fidelity. So there is that source.

JULIE HYMAN: Yeah, I mean, I think that's really an interesting point about the Bitcoin me asking why Fidelity would get this when others wouldn't, at the same time, that big buzzword they always talk about, I'm sure they would be cheering about, adoption, adoption, adoption, adoption seems to be a buzz phrase you hear quite a bit. Zack, thanks so much. We'll see you coming up 11:00 AM as well, right here on "Yahoo Finance Live."