Why Did Fidelity Get Into Bitcoin?

Fidelity is one of the largest asset managers and brokerages in the U.S. Due to its success and longevity, there was no need for it to explore the digital currency space until the mid-2010s when investors began to develop an interest in cryptocurrency. In mid-October 2018, Fidelity launched Fidel🐻ity Digital Assets, a limited liability corporation designed to serve institutional customers and allow them access to the growing cryptocurrency investing environment.

With this new branch, Fidelity entered into the digital currency game in a big way: Fidelity Digital Assets offers offline cold storage custody solutions, trade execution, and other services. Using its clout as a major financial services firm, Fidelity Digital Assets aims to help provide financial institutions with full-service digital asset investments. One question 🦩likely on the minds of many investors 𝄹is why exactly Fidelity decided to launch this new company.

Fidelity's History With Bitcoin

Bitcoin sputtered to a start in 2015, with a price hovering between $230 and $280. By October, the coin's price had risen over $300. More people became interested in the proposition of a digital asset's increasing value, and the cryptocurrency's price began to climb. In early 2017, Bitcoin's price broke through $1,000. Interest surged, and Bitcoin suddenly became the instrument ma♍ny in🥂vestors were considering.

Individual investors were buying Bitcoin and seeing large returns, and institutional investors were chomping at the bit because they could not access the rapidly expanding market. Fidelity, seeing an opportunity to cater to the needs of institutions, decided that the Blockchain Incubator section of its research and development team—the Fidelity Center for Applied Technology (FCAT)—should investigate and find a way to create cryptocurrency investing solutions for institutional investors.

Fidelity Digital Assets

Fidelity Digital Assets services emerged from the research efforts of its Blockchain Incubator. From 2017 on, the company has increasingly worked to offer new ways for institutional investors to gain exposure to the cryptocurrency market.

Fidelity Digital Assets has sought approval for 澳洲幸运5官方开奖结果体彩网:cryptocurrency-related ETFs and trusts with the Securities and Exchange Commission and developed custody and trading services for accredited investors. It has also pioneered digital assets custodianship for its institutional customers by creating clearing and settlement services, which places assets in cold storage and settles transactions with periodical payments.

Fidelity also provides cryptocurrency educational material geared towards institutional clients to help them become informed and make decisions about using crypto as an asset class.

Moving Forward

Fidelity continues to research and innovate new solutions for institutional and accredited investors. In April 2022, the firm announced that it was pioneering crypto-enhanced 401(k)s for interested employers and their employees, which offer exposure to Bitcoin. The crypto-enhanced retirement accounts will use the 澳洲幸运5官方开奖结果体彩网:custodianship and clearing and settlement services it created for institutional investors. These services provide the institutional-level security and liquidity necessary for retirement funds.

Fidelity has also taken the lead on investor cryptocurrency and metaverse education by being the first brokerage to provide a metaverse experience. In Dencentraland, investors can wander through the Fidelity Stack, become familiar with the metaverse, and learn about investing.

The brokerage offers crypto trading through its Fidelity Crypto accounts, where you can buy and sell bitcoin and ether "commission-free" (fees are charged using a spread system). It also has exchange-traded funds that offer exposure to companies involved in the cryptocurrency and digital payments spaces, such as Coinbase, Riot, Marathon Digital Holdings, and Galaxy Digital Holdings.

Its Metaverse ETF holds the issues of companies with involvement in the metaverse, the anticipated combination of virtual and physical existences. Most of these companies are familiar to technology or large-cap investors—Samsung, Microsoft, Adobe, Meta, Tencent, and Google, to name a few.

Last, the Securities and Exchange Commission approved a handful of Bitcoin ETFs in January 2024. Among the variety of ETFs approved during that time was the Fidelity Wise Origin Bitcoin Fund. The fund launched on Jan. 11, 2024.

The Bottom Line

Fidelity is a well-known brokerage that offers investing products to investors of all types. Its Digital Assets 🔥branch offers many ways to become involved in the cryptocurrency and digital assets spaces, and the investment firm now offers a Bitcoin spot ETF as of January 2024.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our for more info. As of the date this article was written, the author does not own cryptocurrency.