Fidelity Wise Origin Bitcoin Fund (CBOE: FBTC)

Fidelity Wise Origin Bitcoin Fund is a Delaware statutory trust formed on March 17 2021. The trust issues common shares of beneficial interest that represent fractional undivided ownership in the trust. The shares are listed on the Cboe BZX Exchange and can be bought and sold through traditional brokerage accounts. FD Funds Management LLC serves as the sponsor of the trust. CSC Delaware Trust Company acts as the trustee. State Street Bank and Trust Company functions as the transfer agent and cash custodian. Fidelity Digital Assets N A formerly Fidelity Digital Asset Services LLC serves as the custodian and holds all of the bitcoin on behalf of the trust. The trust’s investment objective is to track the performance of bitcoin as measured by the Fidelity Bitcoin Reference Rate adjusted for expenses and liabilities. To achieve this objective the trust holds bitcoin and values its shares daily using the same methodology that calculates the index. The index is constructed from bitcoin price feeds from eligible spot markets using a volume weighted median price calculated every fifteen seconds based on rolling sixty minute intervals. The trust does not invest in derivatives and provides exposure to bitcoin through a regulated exchange traded product structure.

The trust generates returns for investors through changes in the market value of its bitcoin holdings. The value of the trust’s shares fluctuates with the price of bitcoin as reflected in the index. The sponsor receives an annual fee of zero point two five percent of the trust’s bitcoin holdings as compensation for services performed under the trust agreement. This fee is accrued daily in bitcoin and payable monthly in either bitcoin or cash. The sponsor also assumes responsibility for all ordinary operational administrative and other ordinary expenses incurred by the trust including fees paid to third party service providers listing quotation and trading costs legal audit regulatory and other costs. Any extraordinary nonrecurring expenses such as brokerage transaction costs taxes or legal fees related to litigation or regulatory matters are not covered by the sponsor and are borne by the trust when incurred. The trust does not engage in active management and does not seek to outperform the index; its purpose is to provide a transparent and low cost means for investors to gain exposure to bitcoin’s price movements.

The trust operates in the niche of exchange traded products that provide direct exposure to bitcoin. It competes with other bitcoin focused exchange traded products such as the Grayscale Bitcoin Trust and various bitcoin ETFs offered by other asset managers. A key competitive advantage is the sponsorship by Fidelity a firm with a long standing reputation in traditional finance and a dedicated digital assets subsidiary that provides custodial services. The trust’s use of a transparent index methodology that aggregates price data from multiple spot markets aims to reduce the risk of manipulation and provides a reliable benchmark for bitcoin’s value. Additionally the trust’s low sponsor fee of zero point two five percent is competitive within the category of bitcoin exchange traded products. The trust’s structure as a grantor trust for tax purposes also simplifies tax reporting for investors compared to some alternative investment vehicles.

The trust’s customer base consists of investors who seek exposure to bitcoin without the operational complexities of directly owning storing or transferring the digital asset. This includes retail investors who access the trust through their brokerage accounts financial advisors who allocate client assets to the trust and institutional investors who use the trust as a component of diversified portfolios. The shares are traded on the Cboe BZX Exchange and can be purchased or sold via any brokerage that offers access to that exchange. While the filing does not disclose specific names of individual investors the trust is designed to serve a broad market of participants who want a regulated and transparent vehicle to participate in bitcoin’s price performance.