US investment manager Fidelity Investments is offering its clients indirect access to Ether through its recently launched Ethereum Index Fund. Interestingly, the new fund is positioned as a limited partnership and is not an exchange-traded fund (ETF).
The mode of investment is through private placement, which means the fund is available only to a select group of investors. Subscription to the fund requires a minimum investment of $50,000, according to the release. The fund will track the performance of the Fidelity Ethereum Index PR (FIDETHP) constructed using Ethereum price feeds from approved crypto exchanges and would reflect the price of ETH in US Dollar. The index uses a volume-weighted median price method with five-minute increments to determine the Ethereum price composite.
The retail brokerage giant announced the launch of the Ethereum Index Fund through an SEC filing, and the fund has already raised $5 million in funds since it was opened for subscriptions on 26 September.
Fidelity’s second foray into the crypto space
The fund is launched by the firm’s Fidelity Digital Assets division, which was established in 2018. The unit had launched Fidelity’s Wise Origin Bitcoin Index Fund I in 2020.
In an e-mailed response to CoinDesk, Fidelity mentioned that they recognize the need for a diverse set of products and solutions in the crypto space for customers to gain exposure. The investment manager said it seeks to align its products to match the financial objectives and risk tolerance of customers.
The successful merge of the Ethereum network on 15 September has spurred investor interest in the world’s second-largest crypto asset by market cap. Post merge, there has been a sharp rise in the staking of ETH on the Ethereum network, making it the most staked crypto asset in the market.
According to stakingrewards.com, over 12.15% of the ETH circulating supply has been staked on the Ethereum network, representing about $20.38 billion worth of ETH. The second-most staked crypto is SOL, with close to $14 billion worth of SOL staked.
Fidelity Investments has $4.5 trillion in assets under management and its increased participation in the crypto market boosts investor confidence about digital assets.