‘The wait is over,' says the email Fidelity sent to customers who have been on the waiting list for its newly launched digital assets platform Fidelity Crypto. Fidelity announced its plans to launch a digital assets trading platform three weeks ago. Fidelity’s new trading platform allows retail investors to purchase and trade digital assets – Bitcoin and Ethereum initially. Some of the perks retail investors would enjoy on the platform include commission-free trading.
Fidelity began researching cryptocurrencies in 2014, then created its institutionally-focused digital assets unit Fidelity Digital Assets in 2018 to provide institutional investors with full-service digital assets investment solutions. As one of the largest brokerage and asset management firms in the world, Fidelity manages up to $9.9 trillion in assets. Fidelity has also been involved in digital assets custodianship for its institutional clients.
Pushback Against Fidelity’s Digital Assets Expansion
Fidelity has launched an array of digital asset products aimed at onboarding different social demographics into the digital assets world. Fidelity added Bitcoin to its 401k plans earlier this year after citing growing interest in crypto-assets. Employers can sign up for the Bitcoin in 401(k) option, and interested employees could opt-in. Fidelity administers the pension plans of over 23,000 companies in the US and holds over $2 trillion in retirement assets.
The option to add Bitcoin to 401(k) has received pushback from some Members of Congress. Three Senators including Senator Elizabeth Warren, a known anti-crypto lobbyist, in a letter last week told Fidelity to reconsider its decision to allow retirement plan sponsors to expose employees to Bitcoin and other cryptocurrencies. The Senators cited the volatility of crypto prices and the recent collapse of ecosystems and centralized exchanges, such as TerraLUNA and FTX, as major concerns.
Fidelity, however, seems adamant in its digital assets pursuit. Despite the recent collapse of FTX, Fidelity has gone ahead to launch its digital assets trading platform, as earlier promised. A Fidelity spokeswoman who spoke to a media outlet said that the recent events in the digital assets industry underscore the importance of standards and safeguards.
Digital Assets Research and Reports by Fidelity
Beyond allowing retail investors to explore digital assets, Fidelity’s interest in digital assets spans the research and documentation of digital assets investment strategies to give its clients access to educational materials to help them better understand the digital asset ecosystem. Clients can also rest assured that the information they get is from a reliable source.
In October 2021, Fidelity released a report titled “Getting Off Zero.” The report focuses on the role of Bitcoin in modern investment portfolios. The report covers topics like Traditional Portfolios and Opportunity Cost, The Typical Bitcoin Investment Thesis, Position Sizing & Portfolio Implication, and Institutional Investor Considerations.
Fidelity has released a follow-up report titled “Applying Machine Learning Portfolio Modeling to Bitcoin.” The report highlights Fidelity’s new, proprietary portfolio modeling technology that uses machine learning. Fidelity says its new portfolio modeling technology can be used to support investment decisions and help explore scenarios but is not meant to give specific forecasts or portfolio recommendations.
The Applying Machine Learning Portfolio Modeling to Bitcoin report was also discussed in a recent Fidelity Digital Assets’ YouTube series “The value Exchange.”
Fidelity says it is increasingly focused on providing new capabilities that analyze digital assets. “Our analysis framework provides one way for investors to consider potential return outcomes under different market environments and make informed investment decisions according to their personal risk tolerance,” the report states.
To learn more about Bitcoin visit our Investing in Bitcoin guide.
To learn more about Ethereum visit our Investing in Ethereum guide.