The 72-year old investment firm announced the launch of separate “Fidelity Digital Asset Services” for institutional investors on Monday. Forbes reported that this firm based in Boston will provide crypto custody services 24/7 and 365 days a year. Institutional investors including hedge funds, family businesses, and market intermediaries are the major players clamoring for this type of solution.
Cryptocurrency Services for Traditional Investors
The service was launched in the middle of last year but now it is a fully-fledged product available for institutional investors. This service is not available to retail investors. Abigail Johnson, Investment Chairwoman and CEO for Fidelity Investment Chairman, described the goal of this service: “Our goal is to make digitally native assets, such as bitcoin, more accessible to investors.” She added that “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.”
About Fidelity Investments
Fidelity Investments has more than $7.2 trillion USD in assets under its management and is the first Wall Street entrant to provide crypto custody solutions. It has around 27 million customers, spending $2.5 billion per year on technology including AI and blockchain. This launch comes as a result of the research conducted by Greenwich Associates which found that 70 percent of executives believe crypto will have a role in the future of the financial sector, yet many are still “sitting on the sidelines.”
Institutional Clients Want Bitcoin
According to Tom Jessop, head of Fidelity investment, the firm is already working with 13000 institutional clients on the potential of holding crypto asstes. He pointed out that “We’ve got some technology that we’ve repurposed from other parts of Fidelity — we can leverage all of the resources of a big organization.”
The Product
Fidelity is looking to offer the following:
- Institutional-Grade Custody of Digital Assets – vaulted cold storage, security protocols, and multi-level physical and cyber controls.
- Trade Execution – It will employ smart order router for trade execution of digital assets.
- Dedicated Client Service – With client service specialists, clients will have excellent custody solution service.
The new service is akin to what other exchanges including Coinbase, Gemini, BitGo, Ledger and ItBit are offering. Moreover, Goldman Sachs and Northern Trust are also stepping ahead to offer custodial services. Fidelity aims to build a “scalable infrastructure.” According to reports, Fidelity will be able to provide “institutional-grade custody, trade, and dedicated client services.”
Fidelity will offer top ranked cryptocurrencies including Bitcoin and Ethereum to its clients. In addition to cold storage, Fidelity will have “multi-level physical and cyber controls. Mr. Jessop is convinced that Fidelity will be ahead of the competition, especially because the fund aims to innovate and bring new products to the platform.
