- Fidelity Digital Asset Services is set to offer cryptocurrency custody as well as trading services.
- The company will be competing with other cryptocurrency giants such as Bakkt and Coinbase
- Fidelity Digital Asset Services ‘involvement in the crypto space could mean digital asset improvements
In an announcement this week, Fidelity Digital Asset Services, LLC stated they will start providing cryptocurrency custody as well as trading services for different enterprise clients. This announcement was a major news since the company will likely compete with Coinbase as well as Bakkt. The three institutions will work as a digital asset discovery, storage, and trading platform.
Fidelity and Their Huge Client
Fidelity Digital Asset Services is one of the 5 biggest financial service providers in the whole world. They maintain about $7.2 trillion in clients’ assets. The news means that there is yet another big player entering the crypto space. The company’s institutionally-oriented cryptocurrency outfit is already in the works. They have also announced that Galaxy Digital, an “alpha custody client”, will be one of their customers.
Possible Improvements in the Crypto Space
Fidelity Investments is known for operating as a brokerage firm. They manage huge mutual funds, offers fund distribution as well as investment advice, wealth management, securities execution and clearance, retirement solutions, and life insurance. Since they are already involved in crypto, it could be a sign that good things are about to happen. The digital assets rapidly could probably mature at the fourth quarter of 2018 and continuing into 2019.
Effects of Fidelity Entering the Scene to Other Crypto Giants
Crypto M&A has improved recently. It has resulted to a convergence appearing to be happening in which crypto is going to be mainstream and will soon be regulated. If this continues, the future of digital assets could be really bright. Fidelity has about 27 million customers. This number could easily represent a huge potential inflow of new money being moved into the crypto space. On top of it all, this could mean that Bakkt and Coinbase will have new serious challengers.
The Bitcoin ETF situation has a deadline of the 27th of February 2019 and by then the outlook for digital assets might be so good the SEC will have to get the ball rolling. The rise of crypto funds and the total number of blockchain and crypto-related deals have surged more than 200 percent this year, according to data from PitchBook that was compiled by JMP Securities. So digital assets likely have a very positive outlook in 2019. The launch of Ethereum Futures by CBOE and others will help as well. An ETF for Bitcoin will simply mean an even easier access for traditional investors to cryptocurrencies.
Coinbase has been attempting to work with institutional investors. This means that it could even become an IPO. Other institutions such as Bitmain, Robinhood, Binance and others in the space could also be considering this move. While Coinbase is known for being a stock broker for amateurs, Fidelity’s goal is to make digitally native assets such as Bitcoin more accessible to larger investors. Robinhood and Circle institutions are into propagating digital assets and crypto markets investment.