Investment banking giant Fidelity Investments will be offering cryptocurrency trading services in the coming weeks.
The service will be overseen by Fidelity Digital Assets, the crypto custody arm of the US$7 trillion Boston-based investment firm, Bloomberg revealed on Monday.
Formed in October 2018, Fidelity Digital Assets began offering Bitcoin custody services to “a select group of eligible clients” in March.
We are live with a select group of eligible clients and will continue rolling out slowly. Our solutions are focused on the needs of hedge funds, family offices, pensions, endowments, other institutional investors. More on our project: https://t.co/EkJ2pWJt2Y #DCBlockchain
— Fidelity Digital Assets (@DigitalAssets) March 7, 2019
How Fidelity’s crypto trading service will work
This latest move continues to position Fidelity ahead of its chief competitors, many of whom have been hesitant to throw their hats into the cryptocurrency ring.
The company joins the ranks of Robinhood and E*Trade in offering crypto trading services to its clients.
However, Fidelity Investments is not offering cryptocurrency trading in the same manner as Robinhood and E*Trade, both of which offer their services to retail customers.
Instead, Fidelity will be offering the ability to buy and sell cryptocurrencies exclusively to institutional investors.
“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,” said Fidelity spokeswoman Arlene Roberts.
Giving investors what they want
The launch of Fidelity’s crypto trading service comes just days after the company released the results of a survey of 400 institutional investors and their thoughts on cryptocurrency.
The survey showed a great deal of interest in cryptocurrency from such investors, which includes the likes of pensions, foundations, traditional hedge funds, financial advisors, and family offices.
Some of the survey results were:
- 22% of those polled had already been exposed to digital assets.
- 40% of institutional investors said they were open to investing in cryptocurrencies in the next five years.
- 47% of the investors surveyed believe that digital assets have a place in their company portfolios.
- 70% of those polled found specific features of cryptocurrency appealing, such as being innovative or its low correlation to other assets.
“More institutional investors are engaging with digital assets, either directly or through service providers, as the potential impact of blockchain technology on financial markets – new and old – becomes more readily apparent,” said Tom Jessop, president of Fidelity Digital Assets.
The survey also revealed some worries that institutional investors have about the cryptocurrency marketplace.
The main concerns the respondents cited were lack of clear regulation, limited track record, price volatility, and lack of fundamentals.
“Institutions are doing the work to develop their own investment theses—but there’s more work to be done as it relates to describing digital assets and blockchain technology in terms that are familiar to them. For example, price volatility, which was a primary concern of survey respondents, may dampen as the underlying custody, trading and financing infrastructure continues to develop in a direction that traditional market participants are familiar with,” said Jessop.