Fidelity Investments and Nasdaq Ventures invested a total of US$27.5 million in a new cryptocurrency exchange called ErisX, as reported by Reuters on December 4th. Details about the investment are in short supply, as both investors were not available for comment. The new cryptocurrency exchange hopes to start operations next year if regulators approve. The company will offer traders and investors spot trading for bitcoins, litecoins, and ether, as well as access to a futures market.
Both Nasdaq and Fidelity are working on their own cryptocurrency-related financial products which include ETFs, futures contracts, and potentially OTC desks (although this is unconfirmed). This investment only strengthens their already strong position, by investing in startup companies that are basically a potential competitor otherwise. ErisX has had a previous funding round where an undisclosed amount was raised with the help of three U.S. companies, TD Ameritrade Holding Corporation, Valor Equity Partners and Cboe Global Markets Inc.
For now, the company says that they will use this latest investment round to push forward for the creation of a safe environment for digital assets where regulators can feel confident that steps to increase security are taken. The company largely depends on regulatory approval, so all of these companies are making a bet that they will get said approval sometime during the next year. With the company having said nothing about ETFs, it is quite possible that they will get the approval, as they will be talking to the CTFC, as opposed to the SEC.
Bitcoin has a clear-cut status as a commodity, securing it far away from the (rightfully) restrictive policies of the Securities and Exchange Commission. If successful, this new regulated exchange will help support the path towards ETF approval and provide the likes of VanEck with reasonable arguments in their battle for regulatory acceptance.