Fidelity Enters Crypto Market With Its Custody Arm

By Rishma Banerjee

Fidelity, which manages 7.2 billion USD worth assets and is the fourth largest asset manager, launched its Crypto custody arm, on 15th October, with the aims of making Bitcoin and other such cryptocurrencies more accessible to probable investors. Abigail Johnson, the CEO of the investment firm,  stated,

“Our goal is to make digitally-native assets, such as bitcoin, more accessible to investors. We expect to continue investing and experimenting, over the long-term, with ways to make this emerging asset class easier for our clients to understand and use.”

This stamp of approval from such an investment giant will naturally give a massive boost to this growing sector. BKCM CEO, Brian Kelly says that this move will enable the crypto market to appeal to institutional investors that include hedge funds, pensions, and endowments. He, on CNBC’s Fast Trader, said,

“It is not so much as the institutional mandate anymore. Custody has been a very big hurdle and having somebody like Fidelity put their stamp on it and say ‘yes, this is a new asset class, and we’re going to custody this.’ I believe they even said they may have some insurance. So that is a step closer. Now, you have Yale investing, Yale endowment, this has put everybody on notice. Now, you either have to have a strategy or you have to have a reason why you’re not,”

CEO of Binance, the biggest cryptocurrency exchange, Changpeng Zhao also asserted that the involvement of Fidelity into the crypto market could make a huge difference, in the years to come, as it would trigger institutional investors with their institutional money to enter the crypto market. He said,

“What happens when a fund like Fidelity allocates a mere 5% of their portfolio to crypto? Have you calculated how much that is?”

( 5 percent of $7.2 trillion assets under management by Fidelity is equivalent to around $360 billion, which is larger than the entire valuation of the cryptocurrency market.)