Wall Street has arrived in the cryptocurrency arena. Fidelity Investments, one of the biggest asset managers on the planet, will launch a crypto trading service “within weeks” according to a Bloomberg report.
Fidelity says its cryptocurrency trading product is aimed at institutional traders and will initially focus on bitcoin. Fidelity spokesperson Arlene Roberts said:
“We currently have a select set of clients we’re supporting on our platform. We will continue to roll out our services over the coming weeks and months based on our clients’ needs, jurisdictions, and other factors. Currently, our service offering is focused on Bitcoin.”
Fidelity is one of the first major players on Wall Street to embrace bitcoin. The firm previously revealed plans for an institutional-grade crypto custody service and promised an over-the-counter platform for bitcoin trading.
Fidelity Cryptocurrency Trading Platform
Fidelity has been teasing its crypto trading product since October 2018 when it revealed plans for an over-the-counter trading platform. In a follow-up blog post in January, the investment giant confirmed it was in the final testing phase and outlined plans for risk and compliance.
The firm is also committed to safe bitcoin storage. Fidelity’s cryptocurrency custody solution is now live, featuring institutional grade storage to at least five major clients. The investment firm launched a spinoff company Fidelity Digital Assets to handle all aspects of its crypto offering.
Fidelity: Institutional Crypto Interest is Growing
The move gives Fidelity a first-mover advantage when it comes to Wall Street’s involvement in cryptocurrency. Most of its major rivals have sat on the sidelines even as institutional demand for bitcoin continues to grow.
— Fidelity Digital Assets (@DigitalAssets) May 2, 2019
As CCN reported last week, Fidelity’s own research revealed that institutional interest in bitcoin is cautiously rising. The research paper said:
“Nearly half of respondents (47%) appreciate that digital assets are an innovative technology play. 46% find digital assets’ low correlation to other assets among the most appealing characteristic. Financial advisors (74%) and family offices (80%) view the characteristics of digital assets most favorably.”
The report also revealed that 20 percent of the institutional investors it surveyed were already exposed to digital assets.
“We just completed a survey of about 450 institutions, so everything from family offices to registered investment advisors to hedge funds. It’s interesting, I think about 20% indicated that they currently allocate to digital assets with an intention to grow that,” he said.
Opening the Floodgates for Wall Street Crypto Adoption
The news comes as traditional finance players vie for space in the cryptocurrency arena. New York Stock Exchange (NYSE) parent company ICE is soon to launch its much-hyped bitcoin futures trading platform, Bakkt, complete with its newly-acquired custody service.
This morning our team at Morgan Creek Digital announced a new $40 million crypto venture fund anchored by two public pensions.
The institutions aren’t coming.
They’re already here. 🚀
— Pomp 🌪 (@APompliano) February 12, 2019
As CCN previously reported, two public pension funds allocated money to Morgan Creek’s crypto fund in February. It’s yet another sign that institutional confidence in bitcoin is growing, despite a collapse in value from crypto’s record market cap.
The presence of Fidelity, alongside major names like NYSE, will likely encourage more hedge fund managers, family offices and pension funds to allocate capital to crypto.