Fidelity’s crypto ambitions are bigger than expected: report

Fidelity’s plan to corner the cryptocurrency market appears to be more ambitious than previously imagined, as the asset manager looks to provide more institutional pathways to digital assets. 

In a recent interview with the Boston Globe, Christine Sandler, head of sales and marketing for Fidelity Digital Assets, said that institutional interest in crypto is growing. For most investors, the primary entry into crypto has been Bitcoin (BTC) and, to a lesser extent, Ether (ETH).

Tom Jessop, who heads Fidelity Digital Assets, said the pandemic was a major motivator for investors to finally get into crypto:

“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.”

It’s no secret that most institutional investors are carefully participating in the crypto market for the first time this year. Institutional interest mostly remains in purchasing Ethereum or Bitcoin directly. Fidelity Investment seems to be one step ahead, aiming to be among the first to offer the infrastructure necessary for investors to directly access the crypto market.

It was in March of this year that Fidelity submitted the S-1 document to the Securities and Exchange Commission (SEC formally seeking the approval of their own Bitcoin ETF named Wise Origin Bitcoin Trust. At the end of July, Fidelity acquired a 7.4% stake in North American crypto miner Marathon Digital Holdings, which was worth $20 million.

Fidelity has also created its own specialized venture capital division called Devonshire Investors, investing in cryptocurrency startups like ErisX, Talos and Coin Metrics.

The company’s crypto ambitions have been fuelled by a growing demand from clients to access crypto investment opportunities. A similar trend is being observed across major institutional funds and banks in the United States and globally. As Cointelegraph recently reported, U.S. bank JPMorgan is now offering clients access to six crypto-dedicated funds. After their initial criticisms of digital assets, firms like BlackRock, Goldman Sachs and Citibank have also expressed a more positive outlook on Bitcoin. Meanwhile, a recent survey from London-based crypto fund Nickel Digital Asset Management revealed that the majority of wealth managers expected to increase their exposure to crypto in the coming years.