“As cryptocurrency rapidly gain credibility and trust, many investment firms are turning their attention to expand the market to retail investors”— Paul Ebeling
Fidelity Investments is 1 of the world’s largest asset managers, and for a while it found no need to explore the digital currency space. But, in October of 2018, Fidelity launched Fidelity Digital Assets, a limited liability corporation designed as a “full-service, enterprise-grade platform for securing, trading, and servicing investments in digital assets,” according to the company’s website.
With this new branch, Fidelity entered into the digital currency world in a very big way: Fidelity Digital Assets offers offline, cold storage custody solutions, trade execution, and other services for the cryptocurrency industry. Using its clout as a major financial services firm, Fidelity Digital Assets has stated its aim to help to provide financial institutions with “highly available, trusted, enterprise-grade services to store, transact, and service…digital asset investments.”
The Big Q: Why did Fidelity decided to launch this new company.
The Big A: In interview Fidelity CEO Abigail Johnson described the company’s initial sortie into the cryptocurrency and blockchain spaces. She described a scenario-planning exercise that took place within the firm and which imagined the impact on Fidelity’s business of a world in which “capital markets became completely frictionless.” That happened just prior to the launch of Bitcoin in Y 2010, at which point, Johnson says, “A few of us were like, ‘Oh, this is kind of actually what we were just talking about in our crazy scenario plan.'”
Ms. Johnson said that Fidelity leaders began to ask how the firm could integrate elements of the new industry into its business, utilizing sample cases to explore possible outcomes. She adds that “the one thing fairly early that…gave us some visibility in that realm was being able to contribute bitcoin to your charitable gift fund.”
As a result, Ms. Johnson suggested that bitcoin entrepreneurs took an interest in Fidelity as a “legacy financial services company” that was “still open to doing this and trying to help them the way we would help any investor.” She explained that this led toward work with adviser clients who were interested in utilizing Fidelity’s services to aid their clients who held bitcoin.
Speaking to the financial media, the founding head of Fidelity Digital Assets, Tom Jessop, indicated that “this is a 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’s company is not the 1st of its public efforts at integrating blockchain and cryptocurrency into its portfolio of services, our firm, Knightsbridge at about the same time enter into our exploration and Friday launghed our new digital investment platform.
Cryptocurrencies are a growing, viable and dynamic area of the financial world, it very well may be thanks to traditional asset managers like Fidelity and us.
BTC beat the Y 2020 returns of gold and the S&P 500, and there are a number of altcoins making similarly exciting moves in the market.
Have a healthy weekend, Keep the Faith!