Financial giant Fidelity Investments, managing a massive $11 trillion worth of customer assets, has recently filed for regulatory approval to launch an exchange-traded fund (ETF) focused on the Ethereum cryptocurrency. The move comes just a day after BlackRock submitted its own application for an Ethereum ETF.

In the filing made with the Securities and Exchange Commission (SEC) on Thursday, Fidelity seeks to create the Fidelity Ethereum Fund, which would hold the Ethereum cryptocurrency. The ETF would aim to track the price of Ethereum, the native token of the Ethereum blockchain network. The shares of the fund would trade on the Cboe BZX Exchange, under the ticker symbol ETHF.

According to the proposal, the Fidelity Ethereum Fund "seeks to track the performance of Ether, as measured by the performance of the Fidelity Ethereum Index," which represents the USD price of ether based on major ether trading platforms.

The filing marks Fidelity's entrance into the growing field of cryptocurrency investments, as the company has been actively expanding its presence in the digital asset industry since 2018. Fidelity's cryptocurrency business launched institutional cryptocurrency trading and custody services, which have paved the way for the latest venture into the ETF market.

The SEC has been under increasing pressure to approve a spot bitcoin ETF and now faces similar expectations regarding Ethereum ETFs. Advocates of cryptocurrencies argue that a spot ETF would provide a safer and regulated avenue for mainstream investors to gain exposure to digital assets.

"We are the seventh filer for spot Ethereum," noted Jaymes Seyffart, an ETF research analyst, on Twitter. Previous filers for Ethereum ETFs have included BlackRock, Grayscale, 21Shares/ARK, VanEck, and Hashdex.

While there is anticipation surrounding the Fidelity Ethereum Fund, it is worth noting that the proposed ETF would likely encounter regulatory hurdles similar to previous attempts at Bitcoin ETFs. The SEC has typically required surveillance-sharing agreements between the listing exchange of an ETF and the underlying spot market for the asset. However, it remains unclear how the SEC views the maturity of the ether futures market, which launched earlier this year, and if it meets the standard for such agreements.

The delay in the approval process for spot Bitcoin ETFs has led to the postponement of decisions on two Bitcoin ETFs from Franklin Templeton and Global X. The rejection of Hashdex's Bitcoin ETF application earlier this week has further highlighted the challenges faced by these types of investment vehicles.

Fidelity's proposal acknowledges the current lack of regulated, exchange-traded vehicles for Ethereum exposure available to retail investors in the United States. Meanwhile, investors in other countries have access to more traditional exchange-listed and traded products.

This year has witnessed a surge in the number of asset managers vying to introduce cryptocurrency ETFs. In addition to Fidelity and BlackRock, rivals such as Invesco and Galaxy Digital have also filed for their own crypto-based ETFs, seeking to tap into the growing demand for regulated digital asset investments.

As the battle for approval heats up, both Fidelity Investments and BlackRock hold substantial assets and expertise to potentially revolutionize the way investors gain exposure to digital assets like Ethereum. The decision of the SEC regarding these proposals will undoubtedly have significant implications for the cryptocurrency market and could further boost mainstream adoption of digital currencies.