Fidelity investment launches its first cryptocurrency initiative

Brian Burns / October 01,2022

Fidelity investment, one of the largest asset and brokerages managers has finally launched its first cryptocurrency custody and trading platform.Initially, fidelity did not get involved directly with cryptocurrencies but rather preferred to partner with Coinbase, the largest exchange for crypto-to-fiat currencies in the world market. The partnership enabled fidelity clients to track the performance of major coins such as Ethereum and Bitcoin through Fidelity Portfolio Summary View.During this period, the only investors allowed to invest in the new class of assets were those that were already registered with Coinbase since Fidelity had not directly incorporated the crypto assets into its infrastructure. Perhaps fidelity opted to use that as a window period to study the market and demand trends for cryptocurrency investors.After a year of careful testing and evaluation, the firm decided to fully incorporate the digital assets into its platform.Fidelity took a tactical stance in dealing with cryptocurrenciesIn an interview with The Street, Hardley Stern, the managing director at Fidelity Labs explained that though the mass adoption of cryptocurrencies is still far from near, the disruptive effect they have on the market cannot be neglected.“Bitcoin and other blockchain technologies are emerging from their infancy but mass adoption is still many years away. Additionally, don’t underestimate their disruptive nature. Just as many other technologies have done in the past, Bitcoin and blockchain will transform how we manage our finances. Stern said.Fidelity also decided to mine cryptocurrencies for a brief period just to get a deeper understanding of how they work.The brokerage giant with $7.2 trillion in customer assets then partnered with Coinbase, a move which saw the company witnessed a remarkable demand for cryptocurrencies by its clients. As such the firm has made known its intentions of serving crypto-interested investors through a transparent and strictly regulated channel.Addressing the market demandsSpeaking on Monday at the Bloomberg’s Institutional Crypto event, Tom Jessup, director of the Fidelity Digital Asset Services announced that the firm will henceforth offer cryptocurrency storage and trading services to its clients. He was also optimistic that the new platform will attract institutional investors.“This [the launch] 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. Jessop explainedAbigail Johnson, the CEO, and chairperson of fidelity also announced that the platform’s main objective was to “ensure digitally- native assets such as bitcoin are more accessible to investors.”