Fidelity announces a new company that will handle cryptocurrency custody

[vit05]

Fidelity announces a new company called Fidelity Digital Asset Services that will handle cryptocurrency custody and trade execution for institutional investors

cnbc.com

Fidelity just made it easier for hedge funds and other pros to invest in cryptocurrencies

Financial services giant Fidelity is taking a huge step into cryptocurrency.

The 72-year-old firm announced the launch of a separate company, Fidelity Digital Asset Services, on Monday that will handle cryptocurrency custody and trade execution for institutional investors.

"Our goal is to make digitally native assets, such as bitcoin, more accessible to investors," Fidelity Investments Chairman and CEO Abigail Johnson said in a press release. "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."

Tom Jessop, head of Fidelity Digital Assets, said the idea of commercializing a standalone crypto company began in the middle of last year.

For now, its services are available to institutions such as hedge funds, endowments and family offices but not to the retail investor.

"We saw that there were certain things institutions needed that only a firm like Fidelity could provide," Jessop told CNBC, adding that it already works with 13,000 institutional clients. "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 is nothing if not big. It administers $7.2 trillion in customer assets, has 27 million customers, and spends $2.5 billion per year on technology, partially through incubators that house its artificial intelligence and blockchain projects. The new digital asset company was born out of Fidelity Center for Applied Technology, or FCAT as employees call it.

The new company will handle custody, or how to safely store digital assets. Crypto companies Coinbase, Gemini (run by the Winklevoss twins), BitGo, Ledger and ItBit are among those already working on similar solutions. Japanese bank Nomura also announced plans in May to offer crypto custody, and Goldman Sachs and Northern Trust are reportedly exploring custodial services. But until now, there's been a noticeable lack of a big U.S.-based incumbent like Fidelity officially entering the space.

more on CNBC.com

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[The Sceptical Chymist]

For now, its services are available to institutions such as hedge funds, endowments and family offices but not to the retail investor.

Very interesting.  One thing I'll say is that endowments ought to be very careful about owning any crypto as part of their portfolio.  It's my understanding that universities' endowments tend to be investments in low-risk assets--dividend-paying stocks and the like especially.

On the other hand, there's the very real possibility that bitcoin could explode to it's most recent ATH and even higher, but it's still very risky.

I think this is great news for crypto and it's solid evidence that Wall Street is starting to wake up to the possibilities of making a profit with bitcoin (and any other coins they might be offering).  This is almost as good as getting the ETF approved, IMO.

[figmentofmyass]

bad news for xapo, coinbase and bitgo---but not unexpected either.

where do you think institutions are gonna go for their crypto custody needs? fidelity and goldman sachs, or some green-behind-the-ears crypto startups with funny sounding names?

[peter0425]

For now, its services are available to institutions such as hedge funds, endowments and family offices but not to the retail investor.

Very interesting.  One thing I'll say is that endowments ought to be very careful about owning any crypto as part of their portfolio.  It's my understanding that universities' endowments tend to be investments in low-risk assets--dividend-paying stocks and the like especially.

On the other hand, there's the very real possibility that bitcoin could explode to it's most recent ATH and even higher, but it's still very risky.

I think this is great news for crypto and it's solid evidence that Wall Street is starting to wake up to the possibilities of making a profit with bitcoin (and any other coins they might be offering).  This is almost as good as getting the ETF approved, IMO.

With lots of positive news coming from Wall Street, I'm sure that they're eager to get a piece of the pie here. Imagine billions worth of money is flowing in the crypto market, every Wall Street hotshot are drooling on how much money they can make here. I do hope that at least this news can give bitcoin a small nudge to $7k and then we will see what happens with the ICE Bakkt physical bitcoin futures offering in November.

[vit05]

bad news for xapo, coinbase and bitgo---but not unexpected either.

where do you think institutions are gonna go for their crypto custody needs? fidelity and goldman sachs, or some green-behind-the-ears crypto startups with funny sounding names?

 Startups always have more facility to adapt and modify the service they offer. I believe that Fidelity will be important to establish trust in this new market. There is still a lot of insecurity not only because of volatility but also because of the fear of not knowing how to keep your assets totally safe. I believe that instead of expelling these startups, the arrival of a giant can demonstrate that the concept is valid and increase the market of all other players.

[aervin11]

Fidelity announces a new company called Fidelity Digital Asset Services that will handle cryptocurrency custody and trade execution for institutional investors .

The new company will handle custody, or how to safely store digital assets.

By the credibility of the company itself, this is undeniably a great NEWS for the crypto community but how does this one differ from ETF? Does this one also needs a SEC approval like those VanEck SolidX ETF? Im really curious about this and wondering how this could happen.

[adaseb]

I am actually still surprised that they went on with their plan. Many of you probably don't remember but they were actually discussing doing this about a year ago.

I remember that they introduced a way you could see your Coinbase balance on your Fidelity account panel and it took into account your total asset holdings.

Then they stopped posting their developement and went quiet and I assumed it would get brushed off, its good that they still held their plans.

[o_e_l_e_o]

This is the bit of the article that got me:

"No one said when some of these early-stage Internet companies in 2000 were going out of business, 'Gee, the Internet is toast,'" Jessop said. "We don't focus too much on the price. It's a foundational technology — people are trying to get exposure to the trend and expect volatility in the assets themselves."

It's one of the most sensible and rational statements about cryptocurrency ever to come out of Wall Street or large financial institutions. It perfectly reflects my feelings (and I would guess the feelings of many people here). I've got a healthy level of exposure and I expect volatility. I don't worry about the 70% loss from ATH. I don't worry about the bear market. Just like the internet, blockchain and bitcoin is a revolutionary technology - it's not going anywhere.

I do hope that at least this news can give bitcoin a small nudge to $7k

Maybe, but I wouldn't expect any more than that short term. We've had plenty of bullish news in the last few months with little if any effect on the bitcoin price. Fidelity only just announced their new crypto firm. I'd expect it to be months before it is fully functional and money starts flowing in.

[Kaznachej123]

Fidelity announces a new company called Fidelity Digital Asset Services that will handle cryptocurrency custody and trade execution for institutional investors

cnbc.com

Fidelity just made it easier for hedge funds and other pros to invest in cryptocurrencies

Financial services giant Fidelity is taking a huge step into cryptocurrency.

The 72-year-old firm announced the launch of a separate company, Fidelity Digital Asset Services, on Monday that will handle cryptocurrency custody and trade execution for institutional investors.

"Our goal is to make digitally native assets, such as bitcoin, more accessible to investors," Fidelity Investments Chairman and CEO Abigail Johnson said in a press release. "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."

Tom Jessop, head of Fidelity Digital Assets, said the idea of commercializing a standalone crypto company began in the middle of last year.

For now, its services are available to institutions such as hedge funds, endowments and family offices but not to the retail investor.

"We saw that there were certain things institutions needed that only a firm like Fidelity could provide," Jessop told CNBC, adding that it already works with 13,000 institutional clients. "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 is nothing if not big. It administers $7.2 trillion in customer assets, has 27 million customers, and spends $2.5 billion per year on technology, partially through incubators that house its artificial intelligence and blockchain projects. The new digital asset company was born out of Fidelity Center for Applied Technology, or FCAT as employees call it.

The new company will handle custody, or how to safely store digital assets. Crypto companies Coinbase, Gemini (run by the Winklevoss twins), BitGo, Ledger and ItBit are among those already working on similar solutions. Japanese bank Nomura also announced plans in May to offer crypto custody, and Goldman Sachs and Northern Trust are reportedly exploring custodial services. But until now, there's been a noticeable lack of a big U.S.-based incumbent like Fidelity officially entering the space.

more on CNBC.com

  Hi vit05! Great news and it brings further legitimacy to the industry. Fidelity is big. Mainstream: $7.2 Trillion Asset Manager Fidelity Will Help Customers Invest in BTC
Institutional money start pouring in soon. 

[LeGaulois]

It's just about forwarding the problem but if it's the only way then we would need more startups like this one to attract investors in a friendly environment. Even if it is not the only one, the more choices there are, the more people will be attracted to it.