Fidelity, the fourth largest asset manager in the world, just announced the launch of a new cryptocurrency platform for institutional investors with huge amounts of capital to spend. The new platform is designed to give investors a secure way to enter the crypto market, reports CNBC.
“Our goal is to make digitally native assets, such as Bitcoin, more accessible to investors,” says Fidelity Investments Chairman and CEO Abigail Johnson. “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.”
Fidelity has created its own spin-off called Fidelity Digital Assets. The Boston-based LLC will house a crypto trading platform and custody solutions to offer a mainstream and secure way for traditional Wall Street investors to hold and store crypto assets. The company will offer its services around the clock, seven days a week, to keep up with the non-stop nature of the cryptocurrency market.
The platform will offer Bitcoin, Ethereum and other unnamed cryptocurrencies.
“We saw that there were certain things institutions needed that only a firm like Fidelity could provide,” says the head of Fidelity Digital Assets Tom Jessop. “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.”
Fidelity says it’s leveraging its years of experience in enterprise security to prevent hacks, and will implement cold storage to keep its digital assets safe. This essentially means the cryptocurrency it holds on behalf of its customers will be disconnected from the internet, and will require special security measures to access and release.
“You might look at the crypto world and say, ‘Wow, is this a new thing?’ but we’ve been managing key materials for a long time,” says Jessop. “We took our learnings in how to run enterprise security, then through our exploration of Bitcoin and some of the people we’ve hired, quickly developed some of the crypto native expertise and federated the two of those things.”
Crypto bull and analyst Tom Lee of Fundstrat Global. Analysis believes that Fidelity’s move bolsters the next phase for cryptocurrencies.
“With Fidelity launching a comprehensive range of services, it is adding to the avalanche of evidence that institutional participation in crypto is the story of 2019. BTC has been muted for much of 2018 – highlights how actual ‘fiat inflows’ (2019) is louder than sentiment.”
Fidelity holds more than $7.2 trillion in total customer assets, with approximately 27 million clients.