- Fidelity will launch Bitcoin custody in March 2019
- The company has plans to enlarge crypto asset base
- The entry of Fidelity could pull in institutional players
Fidelity Investments is pursuing a March 2019 launch date for its cryptocurrency custody services. The service is expected to clear the way to allow institutional investors to enter the cryptocurrency scene.
A January 29, 2019 report by Bloomberg, quoting people familiar with the matter says Bitcoin (BTC) custody services will be the first product of several others are in store and specifically designed for large-scale investors like hedge funds. Once the Bitcoin program succeeds, the insiders hinted that Ethereum (ETH) custody was expected to follow. The Tuesday statement said:
“We are currently serving a select set of eligible clients as we continue to build our initial solutions, […] over the next several months, we will thoughtfully engage with and prioritize prospective clients based on needs, jurisdiction and other factors.”
Enlarging its Crypto Asset Platform
According to the report, the Boston-based investment company has set its sights on the leading altcoins besides the leading Bitcoin and Ethereum cryptocurrencies. The head of Fidelity Digital Assets division Tom Jessop intimated during the Block FS Conference in New York in November 2018 that his company was planning to enlarge its company’s crypto asset platform so they could include trading services for the leading crypto assets based on market cap. Jessop had said then:
“I think there is demand for the next four or five in rank of market cap order. So we will be looking at that.”
Custody is a common practice in the traditional financial markets like stocks that involves third parties holding onto security to reduce their risk of being stolen or getting lost. Even though there are several startups that are offering cryptocurrency custody services, several Wall Street experts have longed to work with large financial service providers, which role Fidelity hopes to play conveniently. This is likely to reduce the increasing incidences of crypto assets getting stolen.
Leveraging on its Reputation
The entry of Fidelity, one of the largest providers of mutual funds and retirement savings firms working with over 13,000 financial institutions into the field of custody services will become a major boost for institutional crypto adoption. The company is definitely planning to leverage its reputation to win over large institutions keen on entering the cryptocurrency trading market.
Major retailers, pension funds and asset managers have steered away from the crypto market because of their concerns on illicit usage, price volatility, and security. Such companies can now cross security concerns from their list of worries with the entry of such a reliable custody option and convince some of them to formally join the market.
