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One of the world's largest asset managers plans to launch new cryptocurrency offerings by the end of the year, the most recent evidence of a broad-based institutional initiative to mainstream digital assets .
Fidelity to Enter Crypto
According to CEO Abigail Johnson, Fidelity Investments, the sixth largest global asset manager, is developing a new suite of crypto and blockchain products.
"We have a few things going on, some of which are partly done, but somehow on the right track because it's not really the right time. We hope to have things to announce by the end of the year, "said Johnson at the Fintech Week conference in Boston.
Although the details remain insufficient, Johnson said Fidelity's upcoming offerings are not what she expected when her firm began researching the space.
As CCN quotes:
"We started by creating a long list of use cases of bitcoin, Ethereum, other crypto-currencies, or just raw blockchain technology. Most of them have been scrapped now or at least put on the shelves. The things that really survived were not the things that I necessarily think we were waiting for. We were trying to listen to the market and anticipate what would be logical. "
As Hacked reported last October, Fidelity appears to have been one of the first major institutions to exploit cryptocurrency. At the time, Johnson acknowledged that US-based mining in his company "pays a lot," but the real motivation was to learn how networks and consensus work.
The adoption of Crypto is growing but the issues remain
With $ 2.5 billion in assets under management, Fidelity is one of the leading players in global finance and its entry into cryptocurrency will provide an instant boost of legitimacy to the sector. Despite the recent slowdown in the market, large institutions ranging from Goldman Sachs to Intercontinental Exchange have announced new cryptographic activities designed to bring digital resources to mainstream circles. Although the pace and timing of these initiatives vary, the underlying trend remains largely in favor of greater adoption, not less.
Some analysts have warned that the institutionalization of crypto-currencies such as bitcoin undermines the fundamental mandate of peer-to-peer money. Andreas Antonopoulos recently expressed this view, saying that the inevitable rise of the Bitcoin exchange-traded fund could do more harm than good.
"ETFs fundamentally violate the underlying principle of peer-to-peer money, where each user does not operate through a depository but directly controls his money because he directly controls his keys," Antonopoulos said.
At this point in the game, assessing the impact of institutional money on cryptocurrency is not an exact science. Several analysts have noted correlations between, for example, the launch of futures on bitcoin and the dramatic fall in prices, but the establishment of causality is less credible given the small size of the futures market and digital exchanges. It has also been relatively easy to show the positive impact of bitcoins futures on volatility. As Diar points out, the volatility of bitcoin has fallen sharply since December.
Disclaimer: The author owns Bitcoin, Ethereum and other crypto-currencies. He holds investment positions in coins, but does not engage in short-term or daily trading.
Image presented with the kind permission of Shutterstock.
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