Fidelity Rolls Out Crypto Services
On Friday, the Financial Times quietly dropped a very important interview — one with Abigail Johnson of Fidelity Investments.
Speaking to the outlet, Johnson revealed that Fidelity’s digital asset branch, FDAS, will finally be rolling out its Bitcoin and cryptocurrency custodial and trade execution services to all qualified accounts, which are believed to be institutional players. The exact details regarding Fidelity’s rollout were not made entirely clear.
However, this does come after the firm has been testing its Bitcoin products with a select set of institutional clients for months.
The CEO went on to state that Fidelity’s custodial service is likely to be a big selling point for institutional clients. Johnson, who has been a supporter of Bitcoin’s technology for years now (they’ve been mining BTC amongst other initiatives). She specifically looked to inheritance, remarking that “there are people out there with significant amounts of wealth in cryptocurrencies, probably Bitcoin… you’ve got to have a plan to be able to get those coins to somebody else [in case of your death.]
In the interview, the financial services giant chief also asserted that she believes that Bitcoin is not a mere trend and is instead here to stay:
“It’s not going away. As long as the value is there, people will look to preserve that value.”
Bitcoin ETFs… What’s That?
While few details are known about the demand Fidelity has been seeing with this product, Adam Back, the co-founder of Blockstream and the creator of one of the technologies that Satoshi was inspired by when creating BTC, posed the following question: “Does Bitcoin even need ETFs, with products like Fidelity customers being able to buy?”
Does #Bitcoin even need ETFs, with products like Fidelity customers being able to buy? (Qualified investors only so far, but in terms of financial institution trust and brand, and US client base, it doesn't get much better). https://t.co/DJvx00rUeG
— Adam Back (@adam3us) October 19, 2019
Indeed, with Fidelity, which has access to thousands of institutional clients that collectively hold literal hundreds of billions if not trillions of dollars, does Bitcoin really need a U.S.-regulated, institutional-centric ETF vehicle to allow for inflows?
The opinions in the replies were mixed.
Some were all for the product. One said that the product that will allow one to hold Bitcoin in the IRA’s or 401k’s is an important puzzle to solve, which is something that Fidelity is seemingly not dabbling in at the moment. An ETF may allow for BTC exposure for IRA’s and 401k’s. Others said that a Bitcoin ETF would legitimize this industry, by imbuing BTC markets with liquidity and the institutional clout that many have been clamoring for.
There were some opinions coming from the other side of the aisle, so to speak.
While he didn’t weigh in on Back’s thread, John Carvalho, the CCO at industry startup Bitrefill, has said previously that ETFs and ETNs aren’t good for Bitcoin. He argued in the replies that these financial products, if traded, “are not adoption of Bitcoin,” but instead are traditional markets trying to help influence the Bitcoin market and its “place in trade, politics, etc.” He added:
Do you think there’s no risk in a massive amount of BTC exposure being centrally held by a Wall St bank? Do you think Coinbase holding tons of coin is not a risk? One major Wall St catastrophe could cause a decade of slowdown for BTC.
Photo by Christopher Sardegna on Unsplash