Fidelity Investment wants to completely focus on bitcoin


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