Fidelity is launching its cryptocurrency wing that will offer digital assets trading and storage services for its existing and potential institutional investors. Fidelity is joining a pool of several other big organizations that have invested in blockchain-related ventures.
An organization of Fidelity magnitude with assets valued at over $2 trillion and controlling another $7.2 trillion worth of customer assets could be the force required to push for cryptocurrencies’ mass adoption.
New outfit
Fidelity Digital Asset Services is the name of the independent business entity Fidelity the parent company has created to handle its digital assets business. The new outfit will execute cryptocurrency trades for its institutional investors and offer storage services for their coins.
“Our goal is to make digitally native assets, such as bitcoin, more accessible to investors,” Abigael Johnson, Fidelity Investments Chairman and CEO. Before Fidelity Digital Asset Services, Fidelity ran a Bitcoin mining farm in New Hampshire. Back then BTC was trading at $180 per coin before hitting an all-time high of $19,783.06. The coin suffered a massive fall in the beginning of the year and is currently trading at $6,460.
Competition
Fidelity’s crypto wing is expected to bring closer exemplary cryptocurrency services to “hedgefunds, family offices and financial institutions.” The American cryptocurrency eco-system is currently dominated by other big players like Coinbase, the company that has partnered with Fidelity where Fidelity customers can link their coinbase wallets to the Fidelity account and can check their cryptocurrencies balances through the Fidelity’s app.
Fidelity will also have to battle it out with Winklevoss brothers’ Gemini, California-based BitGo, Ledger and the New York State Department of Financial Services (NYDFS) NYDFS-regulated ItBit. This does not mean that the US cryptocurrency market is saturated as there are still millions of masses yet to be introduced to the digital assets not only in the US but globally. If anything, Fidelity’s size puts the global financial giant at a better position to reach out to these masses compared to its competitors.
A good number of conventional financial services institutions like the ICE and Goldman Sachs etc. are making entry into the cryptocurrency space. They can’t wish the eminent financial revolution away; a good strategy will be to join the bandwagon like they are currently doing.
