Various Bitcoin funds have popped up over the past few months. A lot of companies are drawn to cryptocurrency despite its major volatility. For Fidelity Investments, the situation has soured as its internal crypto fund has been shut down altogether.
Fidelity Investments Crypto Fund
Fidelity is a well-respected name in the world of finance. Their primary market is the US, where they offer 401k services and retirement products. Even so, the company has high hopes for the cryptocurrency industry, especially in light of the amount of value being moved on an everyday basis.
In the case of Fidelity Investments, their internal crypto fund was well received. It was designed to invest the company’s balance sheet holdings in digital assets. Given the price swings in late 2017, the fund itself was launched at the most opportune time possible. Even so, it did not succeed in the end, mainly due to key staff members seeking greener pastures.
Two of the founding members of the internal crypto fund have departed. Both Nic Carter and Matt Walsh launched Castle Island Ventures. Unsurprisingly, this is another cryptocurrency-oriented venture capital firm. This confirms there is a growing interest in cryptocurrency from financial experts. Unfortunately for Fidelity, it also means their own internal venture is quickly falling apart.
Recovering from the Setback
For Fidelity Investments, this development is not too positive. While one has to commend their approach to cryptocurrencies, this failure is a tough pill to swallow. Wagering the firm’s own capital to gamble on cryptocurrencies is a very risky strategy. However, it does show that the financial sector is taking a greater, and more serious, view of the cryptocurrency space.
Even so, Fidelity isn’t giving up on its cryptocurrency dream. The company still wants to launch its own trading platform and digital asset custody service. That will help bring more legitimacy to the cryptocurrency industry as a whole. As of right now, it remains unclear when such a venture can be launched. Fidelity is still in the process of filling open staff positions related to this business model.
In addition to Walsh and Carter, Fidelity Investments have also lost Ben Pousty (digital asset marketing lead) and Kinjal Shah (senior consulting analyst) to different cryptocurrency ventures recently. This talent drain is not confined to Fidelity either. Goldman Sachs (Richard Kim), LinkedIn (Emilie Choi), Och-Ziff Capital Management (Alesia Haas), and other Wall Street firms have all lost key personnel to cryptocurrency-focused companies. It seems that a growing number of financial and technological executives are choosing to leave traditional companies and climb on board the cryptocurrency train.
What do you think about Fidelity Investments having to shut down their fund due to executive talent leaving? Let us know in the comments below.
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