Fidelity Gets Into Crypto Sector With The Launch Of A Crypto Custody Arm

Fidelity Gets Into Crypto Sector With The Launch Of A Crypto Custody Arm

Fidelity, which currently ranks as fourth in the world’s largest asset managers and boasts of having under its management over $7.2 billion, formally launched its Crypto custody arm on the 15th of October.

Fidelity Announcement Breaking Boundaries For Crypto Sector


During the launch, the firm’s chief executive Abigail Johnson stated that the firm’s main long-term goal was to make Cryptocurrencies more accessible to interested investors. She added that as a firm Fidelity will continue to explore and invest in the sector over the long term in order to make it easier for its clients to not only understand the emerging asset class but to also utilize.

Going by statements made by Brian Kelly, who is the chief executive of BKCM, by Fidelity symbolically stamping the Crypto sector with its approval and officially terming it as a new asset class it has effectively made it more appealing to institutional investors including pensions, hedge funds, and endowments.

With one of the largest asset management and investment firm having just recognized Cryptocurrencies as a new asset class Kelly said that the Crypto sector should brace itself to see more institutional investors flood the sector in the coming months. In the statements he made to the CNBC Fast Trader Kelly said that custody has been a big issue for the Crypto sector to overcome and with the recent announcement made by Fidelity, which also made mention of insurance, this hurdle has just been removed.

Fidelity Invests 5% Of Its Portfolio On Crypto

Kelly added that with major players like Fidelity and Yale endowing and investing in Crypto, every other player in the sector is now on notice to either follow suit or have a reason as to why they are not getting drafting a strategy for the same.

Changpeng Zhao, who is the chief executive of the largest Crypto exchange by volume in the world, had previously stated that it was just a matter of time before institutional investors flooded the Crypto space, a statement that seems to be ringing true. He noted that the 5% that Fidelity has allocated to Crypto is a very significant number.

With Fidelity having a total of $7.2 trillion in assets under its management, the 5% allocated to Crypto equates to $360 billion. This amount is bigger than what the Crypto market is valued for currently. With this kind of investment coming from Fidelity, it is expected that many more institutional investors will come on board and also invest in the sector.

Stronger Institutional Architecture For Crypto Sector

The institutional infrastructure within the Crypto sector is seen to be gradually improving as more leading companies register an interest in investing in Crypto coupled by the number of Crypto based businesses that continue to grow and succeed. Some of the renowned financial institutions that have so far gotten into Crypto are Goldman Sachs and Fidelity.

BitGo’s chief executive Mike Belshe noted that not having custodian solutions was an issue for the Crypto market that effectively created a gap with the institutional investor, a gap that is now closing as more companies invest in the sector.

October 23, 2018

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Samantha Mitchell