Back in September, Abigail Johnson – Fidelity CEO – said that it has a crypto related project in the works, but was waiting for the right time to announce it properly. It seems as if the time has come, as Fidelity has announced that it will be launching a crypto trading facility for its institutional investors. Fidelity is a behemoth of an asset management firm with $7.2 trillion worth of assets under management, and now the majority of those funds are eligible to be traded into the crypto world.
Opening New Avenues into Crypto
The news that Fidelity is opening its customers up to crypto is pretty incredible. Fidelity is leading the United States in 401(k) retirement savings plans, and is one of the largest 403(b) retirement plan providers for not-for-profit institutions – meaning that crypto pensions are about to become a thing.
For the meantime, Fidelity will only be giving hedge fund managers and institutional investors access to Bitcoin and Ethereum markets, but will slowly start adding more markets as time passes. Unfortunately for your average investor, they will have to sit on the sidelines for the foreseeable future with Fidelity, as it has yet to propose a timeline for other traders to be given access to its crypto market options.
First Block Capital Paving the Way
Fidelity is very much following in the footsteps of Canadian firm First Block Capital. It launched its regulated Bitcoin Mutual Fund in September to give institutional investors a safe way to buy Bitcoin using traditional investment platforms. On top of this, First Block Capital also launched a new ETF that focuses on companies that are using distributed ledger technology (DLT). It will invest in firms such as Walmart – using DLT to trace produce back to farmers – and Sony – using DLT to manage rights and digital assets. This is the first ETF to follow DLT pioneers and it has already gained a lot of attention from investors.
Yale Dipping its Toes in Crypto
Another huge boost for Fidelity is the news that Yale is dipping its toes into crypto markets. Managed by David Swensen – world famous investment manager – Yale’s endowment fund will now hold various cryptos. On the back of this move, we are likely to see a wave of universities and investment managers looking to gain exposure to the same markets, as they look to follow Swensen’s moves.
Fidelity’s move into the crypto world comes as no surprise. It has been flirting with cryptos for a number of years now, so it’s about time that it launched a crypto trading desk. As more institutional money flows into crypto markets, we will begin to see volatility drop off significantly. While this is great news for institutional investors as it makes crypto a reliable store of value, many traders who love the huge swings could become upset. Whichever way you cut it, the fact that more money is flowing into Bitcoin can only be a good thing. It proves that investors the world over have confidence in the technology and its future.
