Institutional Investors Are Heading Towards Crypto
The options will be available to all institutional customers and follows the company’s move to begin storing bitcoin for its clients earlier this year. All crypto activity – from buying, selling and trading coins – will occur through the company’s cryptocurrency sub-division, which it’s calling Fidelity Digital Assets. The firm began seven months ago in October 2018. In an age where many traditional investing firms are removing themselves from crypto, Fidelity is moving ahead and fast.
Fidelity spokeswoman Arlene Roberts explains in a statement:
We currently have a select set of clients we’re supporting on our platform. We will continue to roll out our services over the coming weeks and months based on our clients’ needs, jurisdictions and other factors. Currently, our service offering is focused on bitcoin.
Recently, another traditional investment service – E-Trade – announced that it would begin offering trading options for cryptocurrencies to its clients within the next few weeks. While Fidelity is the company that moved first, E-Trade’s entrance to the crypto space arguably shows how cryptocurrencies are entering mainstream status and becoming bigger with institutional players.
One of the big problems regarding bitcoin and cryptocurrencies over the past two years is that despite solid price gains in 2017, many institutional traders refused to get involved in cryptocurrencies thanks, in part, to their volatile natures. Currencies like bitcoin proved to be too vulnerable to outside market influence, which meant that prices could drop just as easily as they could spike.
Thus, institutional players were concerned that their money could be lost just as quickly and as easily as it was invested. Thankfully, these fears have somewhat alleviated with the recent cease of the bearish activity of 2018, and it appears more institutional traders are seeking enter to the cryptocurrency arena.
The primary difference between E-Trade’s plans and Fidelity’s is that the latter is appealing to institutional players only, while the former will still roll out trading services to retail customers.
Is Crypto Reaching Mainstream Status?
A new study released by Fidelity in early May suggests that approximately 47 percent of institutional traders think cryptocurrencies are worthwhile. The study also says that 72 percent of the players who were surveyed choose to buy “investment products that hold digital assets,” while about 57 percent seek to “buy them directly.”
Judging by these figures, one can assume that there is still some concern in play, as some of these investors are not interested in directly owning digital assets but rather “sub-divisions” of such coins. Still, this can be considered a huge step forward and likely to do wonders for the legitimizing of the industry.