Frequently asked questions
What is the Fidelity® Wise Origin® Bitcoin Fund?
The Fidelity® Wise Origin® Bitcoin Fund (FBTC) is an exchange-traded product that seeks to track the performance of bitcoin. FBTC provides investors with the opportunity to gain exposure to the price of bitcoin in a familiar investment structure that passively invests in bitcoin. As an exchange-traded product, investors can purchase the fund through multiple account types, including brokerage, trust, and tax-advantaged accounts.
Does Fidelity recommend an allocation to bitcoin?
Fidelity is not recommending or endorsing this fund or any allocation to this fund. Before investing in FBTC, investors should consider their time horizon, tolerance for risk, and personal financial situation. Learn more in our article that discusses 3 keys to choosing investments.
Bitcoin, and products that track its performance, historically experienced heightened volatility compared to traditional equities. You can learn more about the cryptocurrency through insights from Fidelity.
What's the difference between direct ownership of bitcoin and an investment in an exchange-traded product on a traditional stock market exchange?
FBTC provides indirect exposure to the price of bitcoin through an investment product available on a traditional stock market exchange. FBTC can be held in tax-advantaged accounts, and capital gains will be recorded alongside traditional brokerage tax reporting. FBTC will operate like other exchange-traded products, trading during stock market hours with fees charged as part of the fund's expense ratio.
Direct ownership of bitcoin (“spot bitcoin”) means that the investor owns the actual assets and is individually responsible for the secure custody of their bitcoin via a wallet or third-party custodian. In doing so, the investor may have access to 24/7 trading and can move assets via the bitcoin blockchain. The fees paid on transactions are defined by the individual exchanges, typically based on the size of the transaction, demand for block space, and the exchange's fee model.
For more information, view our article about gaining exposure to bitcoin through a spot crypto exchange-traded product.
What's an exchange-traded product (ETP)? Is it different than an exchange-traded fund (ETF)?
All ETFs are part of a broader category called exchange-traded products (ETPs), which are listed on an exchange and can be bought and sold during market hours like a stock. ETFs, the most common type of ETP, are governed by the Investment Company Act of 1940 and are pooled investment opportunities that typically include baskets of stocks, bonds, and other asset groups based on fund objectives. FBTC is similar to an ETF since FBTC trades on an exchange, however, FBTC is an ETP that holds 100% bitcoin and does not invest in securities; therefore, it is not subject to the Investment Company Act of 1940.
What is the expense ratio?
Fidelity Investments is waiving the fee to invest in FBTC. Starting August 1, 2024, Fidelity will begin charging an expense ratio of 25 basis points.
Is this an active exchange-traded product?
No. The fund seeks to track the performance of bitcoin passively, as measured by the performance of the Fidelity Bitcoin Reference Rate. FBTC holds 100% bitcoin.
Who custodies the bitcoin?
The bitcoin in the Fidelity® Wise Origin® Bitcoin Fund are custodied by Fidelity Digital Asset Services, LLC. Fidelity Digital Assets℠ provides an enterprise-grade custody solution for securing digital assets, featuring extensive operational, cyber, and physical controls.
Will investors be issued dividends? What's the distribution schedule?
Investors will not be issued dividends.
What are some of the risks associated with spot bitcoin ETPs?
Volatility. Gaining exposure to the performance of bitcoin does not shield investors from bitcoin's volatility, which has been substantial at times throughout its history. Unlike many other ETFs and ETPs, which diversify their risk across several stocks or commodities within a specific sector, spot bitcoin ETP holdings are concentrated only in bitcoin.
Trading hours. Spot bitcoin ETPs can only be bought or sold during traditional market hours. Bitcoin trades 24/7 and has made significant double-digit moves on weekends. An ETP investor will have to wait until the market opens to enter or exit positions.
Tracking errors. Like other ETPs, spot bitcoin ETPs may not always exactly reflect the price of bitcoin as a result of management fees and rebalancing costs and delays.
As with any investment, investors should consider their investment objectives, time horizon, tolerance for risk, and personal financial situation. Learn more about the pros and cons of spot bitcoin ETPs.
Is this different from Fidelity Crypto®?
Yes. With Fidelity Crypto®, you can trade and secure bitcoin and ethereum directly with as little as $1. By owning bitcoin or ethereum directly, you can trade your crypto with Fidelity 7 days a week, 23 hours a day. You'll get institution-level security and services that Fidelity Digital Assets℠ has offered since 2018. You can also grow your crypto knowledge with news, articles, podcasts, and webinars, and dive deeper with on-demand education. Fidelity Crypto® is offered by Fidelity Digital Assets℠. Direct trading of crypto must take place in a Fidelity Crypto account and is not available in brokerage accounts. Fidelity Crypto® is not available in every state.
FBTC provides investors with the opportunity to gain indirect exposure to the performance of bitcoin in their brokerage accounts. FBTC is an exchange-traded product and can be bought through brokerage, trust, and tax-advantaged accounts. Custody of the bitcoin held by the fund is provided by Fidelity Digital Asset Services, LLC. FBTC cannot be purchased through a Fidelity Crypto® account.
What is the Designated Investments Agreement?
Placing an order for the Fidelity® Wise Origin® Bitcoin Fund and similar spot bitcoin ETP products requires investors to execute Fidelity's Designated Investments Agreement (DIA). Fidelity requires the DIA on certain complex and risky products. Investors should only invest in investment products that align with their investment objectives, time horizon, and tolerance for risk.
Investors who have not previously agreed to the DIA for their account will be prompted to review the agreement on Fidelity.com after entering trade details. Investors using the Fidelity app will be redirected to a browser to complete this step.
Additionally, Fidelity requires the investment objective of the account that will hold the FBTC shares to have an investment objective of "Most Aggressive." Investors will be prompted to select their investment objective for their Fidelity account. If the investor agrees with that objective, they can then proceed to place an order.
If needed, investors may review and make changes to their accounts' investment objectives on Fidelity.com by selecting Accounts & Trade, then Account Features, then selecting Financial Profile under the Brokerage and Trading section.
How is the price per share calculated?
Because FBTC holds 100% bitcoin, the fund’s net asset value (NAV) will generally reflect the price changes of spot bitcoin (the underlying asset) as measured by the performance of the Fidelity Bitcoin Reference Rate index. The NAV is struck at 4 p.m. ET on weekdays. Like other ETPs, spot bitcoin ETPs may not always exactly reflect the price of bitcoin because of fees and rebalancing costs and delays. The performance of FBTC will not reflect the specific return an investor would realize if the investor purchased bitcoin directly.
Is FBTC eligible for investment through Fidelity's workplace retirement plans?
At this time, exchange-traded products (ETPs) are not available as a designated investment option within a 401(k) plan. If a plan already offers Self-Directed Brokerage (SDB) and allows ETPs as an investment option within their brokerage window, FBTC and other spot bitcoin exchange-traded products may be eligible for investment.
ETFs are subject to market fluctuation and the risks of their underlying investments. ETFs are subject to management fees and other expenses.
Digital assets are highly volatile, and their market movements are very difficult to predict. Various market forces may impact their value including, but not limited to, supply and demand, investors’ faith and their willingness to purchase it using traditional currencies, investors’ expectations with respect to the rate of inflation, interest rates, currency exchange rates, an evolving legislative and regulatory environment in the U.S. and abroad, and other economic trends. Investors also face other risks, including significant and negative price swings, flash crashes, and fraud and cybersecurity risks. Digital assets may also be more susceptible to market manipulation than securities.
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