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Fidelity Applies for Metaverse ETF As Bitcoin Spot ETF Rejected

January 28, 2022

4 min Read

Written by Yaël Bizouati-Kennedy

Edited by Nicholas Morine

Stock investor hold tablet show graph of stock market in hologram via metaverse stock photo

VacharapongW / iStock.com

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Amid soaring interest in the space, financial behemoth Fidelity has filed with the Securities and Exchange Commission (SEC) an application for a metaverse exchange traded fund (ETF) — and investors may be taking notice. Said ETF will track the Fidelity Metaverse Index, “designed to reflect the performance of a global universe of companies that develop, manufacture, distribute, or sell products or services related to establishing and enabling the Metaverse,” according to a filing.

Fidelity describes the term “metaverse” as a “future state of the internet characterized by a network of both augmented reality and virtual worlds that can be experienced persistently and in a shared environment by large numbers of users.”

Stocks included in the index are those of companies that generate at least 50% of their total revenue from computing hardware and components, digital infrastructure, design and engineering software, gaming technology and software, web development and content services, and smart phone and wearable technology per the filing.

Stocks of companies with less than 50% of their total revenue from these business activities may also be included in the index if an insufficient number of companies meet the 50% revenue threshold, the filing notes.

Metaverse Fulfills Desire for Technological Interaction

Sylvia Jablonski, CIO and co-founder at Defiance ETFs, told GOBankingRates that since the start of the pandemic, people have experienced a social and cultural shift wherein digital and remote interactions are the foundations of our daily business and personal engagements.

“While the world and economy will undoubtedly reopen and shift to physical gatherings, the idea of virtual meetups has become an exciting prospect for its efficiency and flexibility,” Jablonski said. “Whether for business meetings, investing in land, or pure fun via interactive concerts, parties, gaming, the metaverse presents a technology evolution and so it’s no surprise to see more metaverse related products hitting the market. The key to the future will lie in Web 3.0, and metaverse is part of this.”

Indeed, Defiance ETFs recently launched The Defiance Digital Revolution ETF (“NFTZ”), the first NFT-focused ETF. With the build-out of the metaverse poised to be a multi trillion-dollar opportunity comes a parallel investment opportunity with NFTs, Jablonski said in December, as previously reported by GOBankingRates.

The market opportunity for bringing any number of metaverses to life may be worth more than $1 trillion in annual revenue, according to a Grayscale report. The asset management firm estimates that revenue from virtual gaming worlds could grow to $400 billion in 2025, from $180 billion in 2020.

Fidelity also filed for a Crypto Industry and Digital Payments ETF, which will track the Fidelity Crypto Industry and Digital Payments Index “designed to reflect the performance of a global universe of companies engaged in activities related to cryptocurrency, related blockchain technology, and digital payments processing,” per another filing.

Fidelity Takes SEC Ruling on Bitcoin Spot ETF in Stride

On Jan. 27, Fidelity saw its application for the Bitcoin spot ETF it had filed for in March 2021 rejected.

“While we are disappointed by the outcome of the SEC’s deliberations resulting in today’s disapproval order, we reaffirm our belief in market readiness for a physical Bitcoin exchange-traded product and look forward to continued constructive dialogue with the SEC,” Fidelity said in a statement to Bloomberg.

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