Fidelity Investments, one of the largest asset managers in the world is scaling its cryptocurrency solutions throughout Europe. Fidelity Digital Assets will provide custodian solutions with the ultimate goal of building out digital asset investing for institutional framework. Fidelity Investments has been involved in the crypto sphere for some time now, and it appears they are making a splash in 2020.
Fidelity Digital Assets – Custodian
According to a recent report by Reuters, Fidelity will be working with London based Nickel Digital Asset Management. Fidelity will leverage its custodian services to offer Bitcoin custody for Nickel. Nickel Digital is a London based hedge fund that specializes in algorithmic trading and arbitrage solutions within spot and derivatives markets. The company was founded by wall street veterans that evolved from firms such as Goldman Sachs, JP Morgan, Bankers Trust and more. In September of last year, it was reported that the hedge fund manager had raised $50 million.
Beneficial Edge
Fidelity is capitalizing on solutions that aren’t being provided by major financial firms. The support for institutional custodianship has grown over the last couple years, but it’s been driven by newer established companies in the digital asset space. Many industry professionals believe this is a key reason institutional investing hasn’t taken off. Despite custodian services growing, large institutional investors want to ensure their client assets are being held by trusted entities. Fidelity has the ability to penetrate this market, as they are one of the largest financial firms globally – servicing $7+ trillion in assets.
Progress Around Fidelity Cryptocurrency Solutions
This recent move by Fidelity shows the progress it’s made the last couple years. Back in October of 2018, Fidelity had outlined the goals it had on the custody side. According to the article, Fidelity was
“Addressing custody issues for institutional investors is one critical step in order for these markets to continue to develop. By building native expertise in these technologies we hope to be well-positioned to serve the needs of our clients for the long term.”
Crypto Institutional Investors
Cryptocurrency did not see as much institutional adoption last year that many hoped for. Towards the end of 2019, the narrative started to shift a bit. With clarity around regulation coming to fruition, plus other key events like Bitcoin Halving, studies show that institutional interest is growing. According to a recent study by Blockware Solutions, they believe institutional interest is growing based on volume comparison between institutional exchanges vs retail exchanges.
It will be crucial for Fidelity Digital Assets to continue expanding globally during a time where regulations are becoming more understandable, and during a time where financial firms are beginning to entertain the idea of diversifying in digital currencies.
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