Author: Anatol Antonovici
Senior Reporter
Anatol Antonovici

Fidelity Might Launch Crypto Trading Service Soon

US-based Fidelity, a financial services firm that operates a brokerage service, is about to launch a cryptocurrency trading functionality aimed at institutional clients, people familiar with the matter told Bloomberg. The investment company might officially announce the new service in the next few weeks.

Fidelity Adopting Crypto Trend

Fidelity is a big name in the financial world and the fact that it shows interest in the emerging market of cryptocurrencies might have contributed to the recent bullish rally of Bitcoin price, which recently exceeded the psychological mark of $6,000 per coin for the first time this year.

The new service developed by the Boston-based firm will enable professional traders to buy and sell digital currencies like Bitcoin. The platform will be managed by Fidelity Digital Asset Services (FADS), a new unit created by Fidelity in October 2018. Earlier this year, Fidelity launched a cryptocurrency-oriented custodian service aimed at institutional clients as well, including family offices, hedge funds, trading firms, and other accredited clients.

Arlene Roberts, a spokeswoman from Fidelity, said in an email letter to Bloomberg:

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 not the first major US brokerage firm to jump in the crypto bandwagon. Elsewhere, Robinhood, which operates a mobile trading app, and E*Trade have already introduced crypto trading features. However, unlike E*trade and Robinhood, Fidelity will focus exclusively on institutional clients, the anonymous source noted.

About Half of Institutional Clients Consider Crypto Investments

The new service from Fidelity might come weeks after the brokerage firm published a study that discovered that about 47% of institutional investors regard digital assets as worth investing in, with 22% of them admitting that they had some form of crypto investments.

The survey questioned 441 institutional investors for about three months starting with November 2018. According to the study, 72% of respondents would buy investment products that have some exposure to digital assets, while 57% of them would buy them directly.

The surveyed investors mentioned a few major concerns related to digital assets, including regulatory uncertainty, increased volatility, and the challenge to accurately determine the right price for Bitcoin and other coins based on fundamentals.

Tom Jessop, president of Fidelity Digital Assets, commented on the results:

We’ve seen a maturation of interest in digital assets from early adopters, like crypto hedge funds, to traditional institutional investors like family offices and endowments. 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.

Institutional investors appreciate the appealing characteristics of cryptocurrencies, with about 70% of them mentioning some advantages. Thus, 47% of the respondents said that they were attracted by the innovative technologies underlying digital assets, especially blockchain. 46% of institutions were happy about the low correction between digital assets and traditional assets.

Jessop went on:

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.

He concluded that institutional sentiment reflected the positive developments in the blockchain ecosystem, with venture investments growing at a healthy pace. Also, the share of security token offerings (STOs), which resemble initial public offerings (IPOs), is expanding, which proves tokenisation is becoming more popular.

Meet The Author
Anatol Antonovici
Anatol Antonovici
Senior Reporter

Anatol has been writing for our news site for a year and is the newest member of our team. While he’s new to us, he’s certainly not new to trading with over 10 years’ experience being a professional financial journalist and working in the markets. Learn more.

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