Report: Fidelity Investments to Offer Bitcoin Trading to Retail Customers

Fidelity Investments is reportedly looking to expand its cryptocurrency trading offerings. The New York-based firm, which manages approximately $4.2 trillion in assets, is reportedly looking to follow several of its top competitors into the crypto market, signalling yet another Wall Street push into the budding crypto space.

Greater Adoption on the Way

A Wall Street Journal report published earlier this week sparked speculation about Fidelity entering the cryptocurrency market. According to the news source, Fidelity intends to offer Bitcoin trading to its 34.4 million customer base through its prime brokerage platform, allowing all retail customers to access Bitcoin investment and trading options easily.

Mike Novogratz, the billionaire founder of crypto investment firm Galaxy Digital, expressed similar sentiments at Monday’s SALT New York conference, even implying that the merger is imminent. As he explained, such a move would signal even more crypto adoption, supporting another possible bull run for the embattled asset.

For the time being, note that all of these are merely rumblings. Fidelity has yet to confirm any expansion into the crypto market, though it stated in a Monday statement that it is always working to provide its customers with greater access to the digital asset market.

Fidelity Ramps up Bitcoin Access

Despite its silence, offering Bitcoin trading as a service will not be such a risk for Fidelity. The asset management firm has been an active investor in cryptocurrency, dating back to 2015 when it began mining Bitcoin. The company already had a Bitcoin trading business for institutional investors and hedge funds as of 2018.

The Wall Street Journal also reported earlier this year that Fidelity had begun allowing its 401(k) retirement savings account holders to invest in Bitcoin directly. Over 23,000 companies with Fidelity affiliations would be able to incorporate Bitcoin investment options and offer them to their customers under the Bitcoin retirement plan. The product will allow retirees to invest up to 20% of their portfolio in Bitcoin if released.

It is worth noting that the plan drew strong opposition from lawmakers on Capitol Hill, including Senators Dick Durbin (D-Ill.) and Elizabeth Warren (D-Mass). Durbin, a well-known cryptocurrency sceptic, slammed Fidelity’s decision to expose its customers to an “untested, highly volatile” asset like Bitcoin.

It’s time to learn the truth about crypto. Let’s start with the obscene amounts of electricity needed to mine Bitcoin and other cryptocurrencies. Families and businesses in America will pay the price for crypto’s mining ventures.

— Senator Dick Durbin (@SenatorDurbin) July 16, 2022

Fidelity’s decision to offer Bitcoin trading to retail customers appears to be a reaction to one of its competitors taking the same step.

BlackRock, the world’s largest asset management firm, announced a partnership with Coinbase a little over a month ago to offer crypto trading to its institutional investors.

According to a blog post on the crypto exchange’s website, mutual customers of Coinbase and Aladdin – BlackRock’s investment management platform – can access crypto trading, custody, compliance, and prime brokerage capabilities. Coinbase Prime, the exchange’s integrated asset management platform for institutional investors, will provide access.

BlackRock is currently managing $8.5 trillion in assets. Simultaneously, Aladdin serves over 200 million institutional clients, including banks, hedge funds, asset managers, and pension funds.

In the post, Joseph Chalom, BlackRock’s global head of strategic ecosystem partnerships, stated that the firm had noticed an increase in institutional interest in cryptocurrency. Customers are also looking for new ways to manage their crypto exposure and trading workflows. Coinbase Prime is the ideal solution for both functionality and compliance.

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