The world’s fourth-largest asset manager, Fidelity launched its crypto custody October 15th. Abigail Johnson the asset management firm’s CEO stated that the firm’s long-term strategy was to make Bitcoin and the rest of the crypto space more accessible to budding investors. The CEO stated that the firm’s goal was to make digitally native assets such as Bitcoin easier to access for investors. She also stated that the firm expects to persist in investing and experimenting over a long period of time as they seek more ways to help investors understand the emerging crypto asset class.
The endorsement of crypto as an asset class by fidelity has paved the way for other institutional investors to come in according to BKCM CEO Brian Kelly. These institutional investors streaming in into the crypto space include; endowments, pensions, and hedge funds. Kelly expressed excitement that one of the largest asset managers in the world in Fidelity, had recognized crypto as an asset class. this according to him would in no time lead to an influx of institutional investors streaming into the crypto space.
While on CNBC’s fast trader, Kelly said “It is not so much as the institutional mandate anymore. Custody has been a very big hurdle and having somebody like Fidelity put their stamp on it and say ‘yes, this is a new asset class, and we’re going to custody this. I believe they even said they may have some insurance. So that is a step closer. Now, you have Yale investing, Yale endowment, this has put everybody on notice. Now, you either have to have a strategy or you have to have a reason why you’re not,”
The endorsement of cryptocurrencies by giant asset manager Fidelity which has about 7.2 billion under its management has also attracted the attention of Binance CEO Changpeng Zhao. Chang stated that when a firm of Fidelity’s financial stature allocates a mere 5 perecnet pf its portfolio to crypto then it could mean a huge deal for the crypto market. This is because 5 percent of 7.2 trillion is 360 billion which is much larger than the entire valuation of the crypto market. This huge foray into the crypto market by Fidelity could see it other institutional investors paying attention to crypto.
The institutional architecture around crypto assets os being rapidly improved being firms within the crypto sector such as BitGo and Coinbase in conjunction with financial institutions such as fidelity and Goldman sachs. BitGo CEO Mike Belshe sated that there is a risisng number of companies closing the gap that kept institutional investors from going into the crypto space. Which means that the crypto space is about to see a whole lot of investment coming in from institutions.
