Fidelity launches crypto trading firm

Fidelity Investments has become the latest asset manager to embrace the cryptocurrency trend by setting up a standalone company to support Bitcoin and Ethereum trading for hedge funds, endowments and family offices.

The US-based spin-off, called Fidelity Digital Assets, will provide an enterprise-grade platform for executing trades in digital assets on a 24-7 basis, mirroring the blockchain’s ‘always on’ trading cycle.

Abigail P. Johnson, chairman and chief executive of Fidelity Investments, one of the world’s largest investment firms, explained that the company is aiming to make digitally-native assets such as bitcoin more accessible to investors.

“We expect to continue investing and experimenting, over the long-term, with ways to make this emerging asset class easier for our clients to understand and use,” she said.

In the most recent edition of its Global Institutional Investor Survey, Fidelity found that 70 per cent of institutional investors said that new asset classes will likely emerge because of advancing technologies, such as blockchain.

The company is in the process of on-boarding its first customers, with the full service being rolled out to market for early 2019.

The subsidiary has 100 employees and will offer services including custody services for digital assets and an option for storing digital investments in ‘cold storage’ physical vaults for added security.

The firm will be led by Tom Jessop, head of corporate business development at Fidelity and former Goldman Sachs technology director, who commented: “We started exploring blockchain and digital assets several years ago, and those efforts have been successful in helping us understand and advance our thinking around cryptocurrencies.”

He added: “The creation of Fidelity Digital Assets is the first step in a long-term vision to create a full-service
enterprise-grade platform for digital assets.”

After a slow start, incumbent asset management firms are increasingly turning to new technologies including blockchain and digital currencies, in the search for fee reduction and accessing the next generation of investors.

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