Investment giant Fidelity, a Boston-based firm has made Bitcoin the main focus in their digital assets division as 90% of its biggest clients are interested in Bitcoin.

Christine Sandler, head of sales and marketing for Fidelity in an interview mentioned that its clients are interested in accessing Bitcoin. She explained that institutional interest in Bitcoin has been accelerating like never before.

Tom Jessop, who heads the crypto arm of the firm, said the pandemic has made governments around the world print money, which was a major reason for investors to finally get into cryptocurrency.

"What really got people off the fence was the pandemic, because you've got this scarce asset class - there will only ever be 21 million bitcoin created and an environment where our currency is being debased, and there's a ton of money printing."

For years Fidelity has been laying the foundation aiming to build a financial infrastructure to bring in the major change in the cryptocurrency space. This will ensure its client's access to the digital asset market.

In order to give an individual investor access to virtual currencies, the Boston investment firm had announced in March its plans to create an exchange-traded fund. Recently, Fidelity said it would add 100 new jobs to its “digital assets” team, increasing the total count to 250.

Jessop says the firm built its crypto offerings to support other digital currencies, but he says, “I don’t think we’ll ever be the most full-service provider, in terms of asset coverage.”

He adds, “safety, soundness, and security” is given the first preference. The freedom for anyone to invent new virtual currency will be followed by lots of questions by Fidelity before it adds new currencies.

The Boston-based firm is not worried about new regulations that are enacted in the US government. The new infrastructure bill on the tax reporting for crypto holdings and regulators asking for more authority to oversee Cryptocurrency Exchange in order to protect users who are investing or using digital currencies as an alternative to traditional banks. 

Fidelity is trying to educate the policymakers to help them formulate the right regulations through Crypto Council for Innovation, along with companies like Square and Coinbase, and its own government relations staffers.The firm wants the crypto assets to be regulated just like any other financial products that consumers and organizations purchase.

The environmental impact of cryptocurrency is a major concern that is gaining more attention globally. Influential people like Elon Musk, Bill Gates have already raised their concern over the new age, power-hungry currencies. Even Investors at Fidelity are concerned over the energy-intensive process of mining cryptocurrencies. To make sure sustainable energy sources are being used toward crypto and mining, the firm relies predominantly on hydropower from Canada and other renewables, according to the report. The firm says it owns a small-scale bitcoin mining operation but the scale of the operation is unknown.

The Boston-based firm has been funding startups in the crypto space. Devonshire Investors, its venture capital division has funded promising startups like Talos, Boston-based Coin Metrics, and ErisX.

Jessop says, "the investments keep us sharper on what’s actually happening, which is super-important given how fast things are moving.”

As institutional investors are participating in the digital asset market for the first time this year, Fidelity Investment is aiming to capture the market by providing the necessary infrastructure for investors to ensure they have direct access to the virtual currency market.

Pavan A

CBW - External Analyst

INDIA