Fidelity Investments Offers Cryptocurrency

3 min read

It’s fair to say that 2018 has been a rough year for digital currency. After catching fire in late-2017, the crypto market has shrunk by billions this year – hundreds of billions to be exact.

However, the recent announcement that Fidelity will soon be offering institutional investors a way to purchase cryptocurrency could help 2018 end on a high note.

The 4th Largest Asset Manager in the World

For those unfamiliar, Fidelity Investments is a financial services company located in Boston. Originally founded back in 1946, the company is now the 4th largest asset manager in the world, with roughly $7.2 trillion in assets under administration.  Very soon, at least some of those assets will be of the digital variety.

In early-2019, the Boston-based corporation will launch Fidelity Digital Assets; a stand-alone company focused on bringing digital currency to the masses. This new spin-off will offer institutional investors a cryptocurrency platform, custody services, and advice. Moreover, F.D.A. plans to make their services available 24 hours a day, 7 days a week – as to align with blockchain’s never-ending trading cycle.

The new venture will start out offering the two largest cryptocurrencies by market cap,  Bitcoin and Ethereum. However, they expect to add additional tokens in the future.

Tom Jessop, the head of Fidelity Digital Assets believes there is a growing demand for this relatively new form of currency.  When discussing his new endeavor, Jessop explained, “This is recognition that there is institutional demand for these assets as a class. Family offices, hedge funds, other sophisticated investors, are starting to think seriously about this space.”

Fidelity isn’t Alone in Marketing Digital Assets to Investors

Of course, this isn’t the first time a company has tried to market digital assets to traditional investors. Early this year, CME Group and CBOE World Markets launched their bitcoin futures.

While it’s clear that more crypto-related products are becoming available to mainstream investors, one still might reasonably ask, is there any interest in said products?

A recent survey conducted by LendEDU and the crypto news website The Daily HOLD, suggests that folks who invest via brokerage accounts, do have some interest in digital currency.

The jointly conducted poll asked 1,000 U.S. investors, all of whom use brokerage accounts, several questions to gauge their interest crypto. It should be mentioned, that none of the people questioned owned any digital assets.

Demand for Digital Assets is Building

“The result: 52% of respondents said they are likely to use their brokerage accounts to invest in cryptocurrency if they had the option while 59% of those investors signaled they would scale back investments in stocks, bonds, and other traditional products to invest more in cryptocurrency.”

These kinds of survey results may be why other big named financial service companies have also begun to take a look at cryptocurrency.

For example, Blackrock, the world’s largest asset manager, formed a team dedicated to examining blockchain – the technology behind most digital currency. While they determined demand wasn’t yet high enough to offer digital currency, CEO Larry Fink did state that “we are a big student of blockchain.”

Conversely, financial powerhouse Goldman Sachs has decided to get involved with cryptocurrency. Specifically, they invested in their own crypto finance company called Circle, back in 2015.

Yes, 2018 is shaping up to be a bit of let down for most crypto enthusiasts – though it isn’t over yet.

Furthermore, if high-profile financial service companies continue to take an interest in the space, the future could be very bright for digital assets in 2019 and beyond.