Trillion-dollar Wall St. asset management firm moves into crypto

Fidelity will offer institutional cryptocurrency and brokerage in 2019.

Fidelity, the $2.5trn Wall St. asset management giant, announced Monday that it will soon begin to offer cryptocurrency custody and brokerage solutions for institutions. These new facilities will be provided by a new off-shoot arm of the business, Fidelity Digital Assets.

According to the The Block – which interviewed with The firm’s head of business development, Tom Jessop, after the announcement was made at a joint conference alongside Bloomberg LLP and Galaxy Digital – custody will be offered for bitcoin and ether first, with other assets being added to the service “down the road”. Trading will be provided by in the form of ‘white-glove’ services, helping asset managers to enter the market. Fidelity, it was explained, will act as a broker for those clients, routing orders to OTC desks where the firm can find the best price for clients.

Jessop also said the firm was excited to announce the new products, given the “increasing level of demand in the market,” after months of development.

“A lot of the effort over the last 6-to-9 months has been taking what had already been built and elevating it to a level in which we were comfortable to go to market,” Jessop said. “While there are many places for consumers to buy and trade crypto, we didn’t see analogous developments for institutions.”

The service is due to go live in 2019, some five years after Fidelity first began to examine opportunities in the crypto space, which has since included a partnership with Coinbase to provide a digital assets viewing platform for its customers.

In September CEO Abby Johnson, a self-avowed crypto enthusiast hinted at a big cryptocurrency announcement at a financial-technology conference in Boston. “We’ve got a few things underway, a few things that are partially done but also kind of on the shelf because it’s not really the right time,” Johnson said. “We hope to have some things to announce by the end of the year.”

Fidelity’s efforts in crypto began in 2014 with research and development, Jessop said. Then, the firm examined mining in 2015. At the end of last year, the firm saw more opportunities in the institutional space among family offices and new crypto funds that were starting up. In 2017, the firm partnered with Coinbase to allow its clients to view their crypto holdings on the digital asset exchange. With its new offering, it may now leapfrog the San Francisco-based exchange and custodian to grab business in this burgeoning area on the back of its size and reputation.

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