Fidelity launches company to facilitate crypto trading
October 16 2018 - 6:07AM
ADVFN Crypto NewsWire
Fidelity launches company to facilitate
crypto trading
Finance industry establishment splits between lovers and haters
of digital currencies
Robin Wigglesworth, US markets editor
Fidelity has launched a company to facilitate cryptocurrency
trading for hedge funds, endowments and family offices,
underscoring how some establishment players in the finance industry
are attempting to profit from the wild west frontier of digital
assets.
The Boston-based investment giant said it would offer institutional
investors access to “enterprise-quality custody and trade execution
services” for cryptocurrencies, such as bitcoin or ethereum, as a
first step towards creating a full platform for the nascent
industry.
“Our goal is to make digitally-native assets, such as bitcoin, more
accessible to investors,” Abigail Johnson, chairman and chief
executive of Fidelity Investments, said in a statement. “We expect
to continue investing and experimenting, over the long-term, with
ways to make this emerging asset class easier for our clients to
understand and use.”
"
I’m here because I love this stuff . . . all that the future might
hold
Abigail Johnson, Fidelity chief executive, at bitcoin conference in
2017
Bitcoin, the first and biggest of a swelling ecosystem of
cryptographic digital currencies, emerged in the wake of the
financial crisis and has quickly become one of the hottest — and
most controversial — subjects on Wall Street. Critics say
cryptocurrencies enable crime, are a fad, and in many cases
fraudulent. Supporters argue that they will revolutionise
capitalism.
Howard Marks, the founder of Oaktree, has argued that bitcoin “will
be shown not to have any substance”, while JPMorgan Chase’s Jamie
Dimon has called cryptocurrencies “a scam”.
However, there has been rising interest from the some of the
financial industry establishment to capitalise on the mania. The
Chicago Mercantile Exchange and Cboe Global Markets, two big
exchange groups, have launched bitcoin futures, Intercontinental
Exchange earlier this year launched Bakkt, a group that also aims
to build modern market infrastructure for the crypto industry.
The gradual entry of the Wall Street establishment has done little
to quell the industry’s volatility, with bitcoin tumbling from a
high of over $19,500 in December to $6,420 today.
Bitcoin’s average volatility this year is more than five times the
average volatility of the US stock market. Fidelity said it had
started exploring cryptocurrencies and blockchain, the
decentralised ledger that backs bitcoin, in 2013, and had since
then experimented with mining bitcoin and partnering with other
players in the nascent industry, as Ms Johnson starts to stamp her
mark on a company founded by her grandfather.
“Some of you might be wondering: Why am I here today?” Ms Johnson
said at a cryptocurrency conference in 2017. “I’m here because I
love this stuff . . . all that the future might hold.”
But while Coinbase and other cryptocurrency platforms are primarily
aimed at retail investors, Fidelity said its new “Fidelity Digital
Assets” arm would help more sophisticated institutional investors
into the field by helping trade and store cryptocurrency assets
safely.
“We started exploring blockchain and digital assets several years
ago, and those efforts have been successful in helping us
understand and advance our thinking around cryptocurrencies,” Tom
Jessop, head of Fidelity Digital Assets, said in the statement.
“The creation of Fidelity Digital Assets is the first step in a
long-term vision to create a full-service enterprise-grade platform
for digital assets.”
By Robin Wigglesworth, US markets
editor
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