Assessing the fiscal and management risks linked to corporate political ties in digital asset investments: A study on FBTC

Once considered a specialized area within finance, the digital asset industry has now become a fundamental part of international capital markets. Leading this shift is the Fidelity® Wise Origin® Bitcoin Fund (FBTC), an exchange-traded product that tracks the price of Bitcoin. FBTC delivers institutional-level transparency and infrastructure, but its governance and risk profile are deeply influenced by the political maneuvers of its parent, Fidelity Investments. This article explores how Fidelity’s political ties—especially its lobbying and regulatory activity—impact both risks and prospects for digital asset investors, using recent events to highlight why comprehensive due diligence is essential.

The Political Backbone of Fidelity’s Power

Fidelity’s leadership in digital assets is anchored in its deliberate interactions with lawmakers and regulators. The FMR LLC Political Action Committee (FIDELITY PAC) has played a pivotal role in influencing digital asset legislation. From 2023 to 2024, more than 59% of Fidelity’s lobbyists had previous government experience, demonstrating a “revolving door” practice that strengthens the company’s legislative sway. For example, Fidelity’s lobbying for the Financial Innovation and Technology for the 21st Century Act (FIT21), a bipartisan bill approved in 2024, led to digital assets being recognized as commodities, reducing regulatory confusion and supporting offerings like FBTC.

While this regulatory progress has allowed FBTC to function across a patchwork of legal frameworks, it also prompts debate about whether corporate interests align with public policy. Fidelity’s efforts to advance the CLARITY and GENIUS Acts—which seek to standardize digital asset regulations across different federal agencies—highlight its active role in shaping a regulatory landscape that favors large institutional products. Yet, this influence also attracts closer regulatory examination, especially from agencies like the SEC and CFTC, which have previously disputed FBTC’s unregistered status.

Governance Challenges and the Unregistered Structure

FBTC’s exemption from the Investment Company Act of 1940 presents both opportunities and drawbacks. By sidestepping registration, Fidelity enjoys greater freedom to innovate, but this comes at the expense of investor protections available to registered funds. The governance of FBTC relies on oversight from entities such as FD Funds Management LLC, the Delaware Trust Company, and State Street Bank. However, the lack of formal regulatory protections requires investors to depend on Fidelity’s operational transparency and reporting.

Recent changes have brought this issue into sharper focus. In 2025, Fidelity revised FBTC’s Trust Agreement to permit in-kind creation and redemption of shares, enhancing liquidity in response to Bitcoin’s price fluctuations. While this adjustment meets market needs, it also illustrates Fidelity’s power to alter governance terms without direct investor input—posing a risk for those who do not have a say in these decisions.

The Necessity of Thorough Due Diligence

Given the interplay between corporate political engagement and governance, investors must commit to careful due diligence. Three main points stand out:

1. Lobbying Openness: Investors should carefully review the magnitude and direction of a company’s political contributions. For instance, Fidelity’s $418,000 in PAC donations to other committees in 2025 indicates alignment with certain policy goals. Recognizing these relationships can expose possible conflicts or blind spots in regulation.

2. Regulatory Adaptability: The digital asset market is subject to frequent changes, both in value and in regulatory stance. Fidelity’s push for deregulatory measures, like FIT21, has eased compliance burdens for FBTC, but new laws—such as the suggested STABLE Act—could bring renewed uncertainty. Investors should evaluate how well a firm’s political approach readies it for such developments.

3. Alignment with Institutions: The presence of institutional investors such as Goldman Sachs and Jane Street in FBTC demonstrates trust in its framework. However, shifts in holdings among major players (like ParaFi Capital’s 86.32% increase) reflect the sector’s volatility. Investors must judge whether their own risk appetite matches the changing institutional environment of the fund.

Investment Guidance: Weighing Progress Against Prudence

FBTC stands out as an attractive way to gain exposure to Bitcoin, thanks to its robust custody and liquidity arrangements. Nevertheless, the fund’s performance depends on Fidelity’s capacity to manage regulatory and political challenges. Investors should:

• Spread Risk: Refrain from concentrating investments in products linked to one company’s political agenda.
• Stay Informed on Policy Shifts: Keep a close eye on Fidelity’s lobbying efforts and policy outcomes, especially in markets like Canada and Brazil where its reach is expanding.
• Consider ESG Factors: Fidelity’s focus on profits in politically sensitive regions (such as China) may not always align with environmental, social, and governance standards, which should be considered when building a portfolio.

Final Thoughts

The advancement of digital assets is closely tied to the political strategies of their major corporate backers. Fidelity’s impact on FBTC’s management and compliance environment highlights both the opportunities and hazards inherent in this relationship. For investors, the takeaway is unmistakable: thorough due diligence must go beyond financial analysis to include the political frameworks that underpin digital assets. In a sector where corporate alliances can change policies as quickly as they shift markets, maintaining vigilance is essential for sound investment decisions.