Unfazed by Crypto Slowdown, Fidelity Starts Offering Services to Institutional Investors

In October 2018, financial services giant Fidelity Investments announced the launch of its cryptocurrency subsidiary Fidelity Digital Assets. The subsidiary offers crypto trading and custody solutions to institutional investors like hedge funds and endowments.

Despite the latest crypto winter, Fidelity investments has started offering its services to institutional players. Tom Jessop, head of Fidelity Digital Assets, told CNBC that his company is undeterred from starting its operations despite the ongoing slowdown in the crypto space.

Jessop stated: “In terms of our pipeline, prices really haven’t had an impact. If you started a crypto fund at the height of the market you’re probably hurting right now”. 

When Fidelity made its announcement in October 2018, the crypto market was already suffering from bearish blows. However, since then, things have only turned south with little signs of recovery. With bears dominating the crypto market, institutional investors are currently in “wait and see” mode accepts Jessop.

But looking into long-term interests, investors have also started adding valuable crypto assets to their portfolio. Big institutional and corporate players see cryptocurrencies as a store of value during emergency or crisis-like situation while players also see it as an opportunity to trade.

Jessop said: “If anything, they (institutional investors) are as encouraged now as they were when prices were higher. At some point, there will be an attractive entry point. But by the same token people don’t want to be early even if we’re well off the highs”.

Fidelity’s findings are based on its survey of 450 financial institutions comprising of hedge funds and endowments. Based on its survey, Fidelity found that 22 percent of the respondents already owned digital currency and were planning to double their portfolios.

Fidelity Digital Assets provides guidance to buy and sell digital assets along with providing safe custody solutions. Going ahead, the company is also plans to diversify its business venturing into other aspects like providing education for investing in crypto and understanding client needs.

Fidelity’s entry in the crypto sector can certainly attract more institutional players to participate while steering them towards mass adoption of cryptocurrencies.