- The new crypto asset management plan that differs from everything else in the market
- Fidelity will work with unnamed exchange and infrastructure providers
- Jessop believes their vaulted cold storage custody solution is the institutions’ missing link
Despite the high speculation and public hype about cryptocurrencies, institutional investment has been happening on the fringe with many banks, hedge funds and pension funds hesitant to get involved. Fidelity Digital Asset Services is about to change that with a plan it believes will finally rope in institutional investors.
Bridging the Gap
Fidelity, the $2.5 trillion Wall Street titan, has a brand new crypto asset management plan that differs completely from what anyone else in the market is doing. The president of Fidelity Digital Asset Services Tom Jessop has laid bare the plans during an unconfirmed interview with Laura Shin. The head of Fidelity’s new investment arm stated they are going against the grain and will not open an exchange like others are doing. He stated:
“Other folks are already doing quite a good job at that […] the firm instead wants to focus its energy on creating high-quality market access services for its customers.”
Without giving specifics, Jessop said Fidelity will work with unnamed exchange and infrastructure providers to change the market trend towards a new direction that suits the needs of institutions as opposed the current trend that is retail client focused.
In the podcast, Jessop says Fidelity is creating a new platform based on a more traditional model. He says the initiative is the result what he believes is a problem with the current market where buyers and sellers of cryptocurrencies must have funds upfront before they can trade in crypto exchanges with the need for pre-funded accounts being the main cause of friction.
Fidelity will follow a model that will allow users to execute trades at the exchanges that offer the best prices and then plan how to do the settlement, which is what the institutional demand requires according to Tom Jessop.
Institutional Investment on the Cusp
Industry experts believe institutional investors are now ready to enter the field following many positive developments. Many countries are taking a positive stand in favor of digital assets and several others are in the evaluation process before they can declare their verdict. However, the news of companies like Goldman Sachs and Coinbase launching their own custodial services and the ongoing trends point towards an increasing appetite of cryptocurrencies for institutional investors.
Jessop believes there are many investors with large positions in crypto who can’t trade their cryptos for lack of good custodians and this is the gap the Fidelity wants to fill. He says Fidelity will create a vaulted cold storage custody solution, which will be paired with traditional security protocols, which he claims is the missing link that will finally bring in flocks of institutional investors. Jessop concludes:
“Fidelity is excited to be the first, or one of the first, and expect there will be more [asset management firms] behind us.”
