Fidelity is one of the biggest names in financial services nowadays, and a company that is in the latest daily crypto news on DC Forecasts. The reason why is simple – the $7.2 trillion worth asset manager recently decided to help institutional investors add Bitcoin and other cryptocurrency assets to their multi-billion dollar portfolios.
Fidelity Investments is now the fifth largest asset manager in the world. It proudly works with 27 million clients and $7.2 trillion in customer assets. In the official announcement, it said that it is launching a separate company that will provide cryptocurrency custody and trade execution services to companies.
As CNBC reported, the company will serve as a ‘bridge between institutional investors and the retail-focused cryptocurrency industry’. The CEO and chairman of Fidelity, Abigail Johnson, confirmed this, stating in the press release:
“Our goal is to make digitally-native assets, such as bitcoin, more accessible to investors. 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.”
This new venture will be led by Tom Jessop, who has spent 17 years at Goldman Sachs before joining the blockchain startup Chain as a president in 2017 – followed by Fidelity in 2018 as a head of corporate business development.
“We saw that there were certain things institutions needed that only a firm like Fidelity could provide. We’ve got some technology that we’ve repurposed from other parts of Fidelity — we can leverage all of the resources of a big organization,” Jessop told CNBC.
Earlier this year, the news reported that Fidelity was apparently building a cryptocurrency exchange. At the time, Abigail Johnson attended a cryptocurrency conference and told the audience that she was a “big believer” in the technology.
This will certainly allow Fidelity to position itself among the leaders in the burgeoning crypto market, which is apparently attracting the eyes of major university endowments such as Harvard and Yale.
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“By using Coinify, we are not running into the knife. It is still not clear to me how blockchain is any better than other database technologies. The transactions are so far more expensive and slower than a normal payment method. Decentralization brings only cumbersome improvements. None of the blockchains scale enough. But maybe I have not invested enough time and therefore understand too little how the blockchain ecosystem works.”Herren said that the decision comes after the prolonged bearish correction on the market where most of the crypto assets lost nearly a third of their value. Despite the fact that investors didn’t really get scared of the decline in prices, institutional adoption is still uncertain regarding making more profits. For example, back in 2018 in June, the Expedia hotel booking platform deleted Bitcoin out of their options and in the same year couple of months back, Reddit also stopped accepting cryptocurrency for its gold membership plans. Years back, Bitcoin became popular because of its attractiveness as a cheaper alternative for expensive payment processors. But as the technology got more popular, the network was unable to handle a higher number of transactions such as Visa or MasterCard and that’s why retailers didn’t choose crypto for making transactions. The Swiss retail giant brings bitcoin back into the retail game. However, traders who are into crypto or those who just hold on to it for better days can now use their coins to purchase something from the retail platform.
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