The new crypto currency arm from Fidelity Investments is now up and running. The unit, Fidelity Digital Assets, started operating at the beginning of the quarter but made no noise. It has already begun providing trading and crypto-custody services to institutional investors such as hedge funds and private asset managers.
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Bear Market – Which bear market?
Tom Jessop, head of Fidelity Digital Assets, told CNBC that the so-called crypto winter had not affected the launch of the new unit. Weak prices could not have dampened the firm's institutional crypto currency offerings.
"In terms of our pipeline, prices really had no impact. If you put on a crypto fund at the height of the market that you're probably hurting right now, quoted on March 8, Jessop said.
Since the announcement, bears continue to dominate the market. Last year, Bitcoin Core lost more than 80 percent of its value, slipping from a high of almost $ 20,000 to $ 3,879.
In 2019, prices seem to have stabilized between $ 3,300 and $ 4,000. However, conservative institutional investors, such as those courted by Fidelity, were reluctant to enter the cryptocurrency space. This is partly due to concerns about the volatility of Bitcoin, which can oscillate or crash by as much as 10 percent within hours.
Wait and see attitude
Jessop admitted that institutional investors are still waiting for cryptocurrency investments. However, he stated that there is a long-term interest of such investors to include crypto in their portfolios. Many corporate investors consider the cryptocurrency valuable during a crisis, while others see it as a trading opportunity. Jessop said:
If anything, they are just as encouraged (institutional investors) as they were then when prices were higher. At some point there will be an attractive entry point. But for the same reason people do not want to be early, even when we are at a peak.
To gauge the level of interest, Fidelity surveyed some 450 institutions, including wealthy funds, hedge funds and foundations, CNBC reported. The results showed that 22 percent of respondents already had cryptocurrency and were planning to double their portfolios.
Fidelity Digital Assets will help these investors buy and sell cryptocurrencies across multiple exchanges, as well as securely store their digital assets. Jessop also revealed that some aspects of the business are still ongoing, such as broadening the areas in which business can be done while accommodating competing customer needs, some of which require a bit of training in crypto investment ,
Fidelity's entry into the cryptocurrency industry is considered an important turning point in bringing institutional investors into the same area. The 72-year-old family business manages retirement plans and investment funds.
What do you think about the new crypto-currency unit from Fidelity? Let us know in the comments below.
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