A report by the Boston Globe has revealed that Fidelity is diving into the crypto space more than previously imagined. Fidelity Digital Assets, Fidelity’s crypto-dedicated subsidiary, launched in October of 2018 with the goal of creating crypto services for the investment company’s institutional and sophisticated investors.
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Now, Fidelity says that 90% of its biggest clients are asking about Bitcoin. The head of sales and marketing for Fidelity Digital Assets, Christine Sandler, told the Boston Globe that the entry vehicle to crypto for investors has mostly been Bitcoin but other cryptocurrencies, like Ethereum, have a growing interest as well.
“We’re dealing with the more traditional investors, and the entry vehicle to this space is largely Bitcoin,” said Sandler. Interest in things like Ethereum “has been escalating in the last few months, but it’s not anything close to what we see in bitcoin.”
The President of Fidelity Digital Assets, Tom Jessop, says that the pandemic has been a large catalyst for cryptocurrency investment given the uncertainty of the time.
“What really got people off the fence was the pandemic, because you’ve got this scarce asset class — there will only ever be 21 million bitcoin created — and an environment where our currency is being debased, and there’s a ton of money printing,” said Jessop.
Jessop added that when investors like Paul Tudor Jones and Stanley Druckenmiller began speaking about Bitcoin as a hedge against inflation, “that’s when the match was set to the bonfire.”
But after all of the interest from the company’s larger investors, Fidelity is looking to bring Bitcoin exposure to retail. Upon the regulatory approval of crypto-related ETFs, Fidelity is planning to create a Bitcoin ETF that would allow broader investors outside of just higher net worth and institutional players.
“If someone just woke up one day and said, ‘I need to have exposure to bitcoin,’ their options are limited,” said Sandler. “The ETF would be a much more accessible product.”
Fidelity is making its bet on Bitcoin and the crypto space further with investments in various crypto startups as well like the crypto data company Coin Metrics and exchanges like ErisX and Talos.
Jessop said that these kinds of investments “keep [Fidelity] sharper on what’s actually happening, which is super-important given how fast things are moving.”
This story is developing.