The news of the yesterday’s day was Fidelity and their announcement of opening of the crypto trading desk. The community reacted mostly positively to the news but you could also feel a bit of jade and fatigue from these “gigantic” and hyped news. The drill is always the same: mainstream adoption, financial institutions entering the market, a lot of money waits on the side eager to invest in crypto etc.
Fidelity is one of the enablers, custodians, companies that build infrastructure needed for the big money to flow into the crypto river. It is undoubtedly huge company with 27 million customers and a $7.2 trillion of dollars under their management. But not only that, it is a credibility booster and pointer for other money management firms to enter the market as well – or you think they will sit calmly and watch competition invest in risky, but promising new asset?
Fidelity was already part of the cryptocurrency market through their partnership with Coinbase which gave an opportunity to their customers to tip their toes into the crypto water. After a year of this type of “testing” of crypto markets, Fidelity decided to pull the trigger and setup their own, internal trading desk. THAT is the big plus and indicator that crypto is about to reach the level of interest of the really big money organizations with heavy purses.
Hadley Stern, senior vice president and managing director at Fidelity Labs, told The Street in August of last year that the investment company does not take for granted the disruptive nature of the blockchain, even though this new asset class still requires significant work in infrastructure development and adoption to grow.
“Bitcoin and other blockchain technologies are emerging from their infancy but mass adoption is still many years away. Additionally, don’t underestimate their disruptive nature. Just as many other technologies have done in the past, Bitcoin and blockchain will transform how we manage our finances,” said Stern.
Since its partnership with Coinbase and the integration of crypto onto the Fidelity Portfolio Summary View, it is very probable that Fidelity observed a considerable spike in interest and demand for cryptocurrencies from its customers.
Similar to Goldman Sachs, Citigroup, NYSE, Bakkt, and TD Ameritrade, Fidelity has stated their plan of serving investors that are interested in investing in the cryptocurrency market through a strictly regulated and transparent channel.
Founding head of Fidelity Digital Assets Tom Jessop said in an interview:
“This is a recognition that there is institutional demand for these assets as a class. Family offices, hedge funds, other sophisticated investors are starting to think seriously about this space.”
And that is the punchline – people with deep pockets caught sight of crypto, they liked it and they want in. We as first movers should be welcoming them with open arms, mostly in educational sense – explaining and evangelizing bitcoin and crypto idea to them. But seeing the portfolio bulk up is not bad either.