Fidelity plans to offer crypto trading within “a few weeks”

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Judging by yesterday’s Bloomberg reports, Fidelity Investments is planning to offer the world’s most popular crypto asset to their institutional customers within a few weeks. 

What is Fidelity?

Fidelity Investments is a Boston-based American multinational financial service corporation. It is commonly referred to as one of the largest asset managers in the world with $2,46 trillion in assets under management. Also, their combined total customer asset value is around $6,7 trillion. Moreover, they operate a brokerage firm, provides fund distribution and investment advice, retirement services, wealth management, securities execution and clearance, and life insurance.

Plans to offer cryptocurrency trading to customers

In October 2018, Fidelity created “Fidelity Digital Assets” based on their belief that Wall Street will soon start trading and safeguarding digital assets. This has put them in front of their competitors as other firms hasn’t publicly shown any interest in digital currencies.

Now Fidelity would join brokerages like E*Trade Financial Corp. and Robinhood in order to offer crypto assets to their clients. However, Fidelity is targeting institutional customers not like Robinhood or E*Trade – retail investors. Fidelity backs their actions with their study which they released on May 2. It show that around 47% of institutional investors think that digital assets are worth investing in.

“We currently have a select set of clients we’re supporting on our platform. We will continue to roll out our services over the coming weeks and months based on our clients’ needs, jurisdictions, and other factors. Currently, our service offering is focused on Bitcoin,” says Fidelity spokeswoman Arlene Roberts.

Digital Gold – Bitcoin.

Bitcoin is up more than 50% this year, recovering from the 2017 bull run all-time-highs when it surged to around $20,000. Now the digital asset sits at $5,900 looking to touch one of the most important trend-lines at $6,300.

The question, that most Bitcoin investors after reading this news, would be – will this affect the price of Bitcoin? It is not quite clear whether Fidelity will open up a digital asset brokerage or sell these assets using the OTC (over the counter) method. One thing is for sure – institutional investors are eying cryptocurrencies, especially Bitcoin. Not long after, Fidelity’s competitors will also start looking into the crypto niche. This will drive user adoption and new money coming into crypto. Referring to Fidelity’s survey where they questioned 441 investors – 72% prefer to buy investment products that HOLD digital assets, while 57% prefer to buy them directly.


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Russia`s crypto FUD influence on markets

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Many news outlets have recently posted some controversial headlines about Russia converting their USD reserves to Bitcoin. The initiative behind such an act would be Russia’s willingness to bypass U.S. imposed sanctions using cryptocurrencies. Statement by V. Ginko – a well renowned Russian professor:

Whether or not this is going to happen, it is fundamentally important to understand how this can affect the crypto markets before you do any investment activity.

Difference between exchange and OTC crypto markets

Before we proceed with further analysis it is important to understand the difference between retail and OTC (over-the-counter) markets. The common thing between both markets is that they both allow to buy and sell assets, securities, cryptos etc. The difference is in the way how traders execute their orders. In OTC markets people do their trades in person choosing one explicit party. Exchange markets, on the opposite, use centralized framework and trading system executes order automatically choosing the best possible match for your order.

Why Russia will not buy their bitcoins using an exchange?

Although OTC market seems like a much of a fuss it is better for moving large amounts of money. At the current market stage, crypto has lost most of its mainstream attention and order books are thinner than ever. According to the current data (02.02.2019) of Bitstamp exchange, even 100 million of Russia`s money would inflate Bitcoin price by 25k USD. That makes every next Bitcoin Russia buys more expensive, therefore, they have a large slippage. 10 billion is too many funds even for buying bitcoin gradually due to the low market depth. OTC exchanges almost completely exclude gradual price increase for each bitcoin bought because it is not a centralized system and does not update bitcoin price live. 

Market depth on Bitstamp exchange, Source:

Summary: How should I react to this event?

The most likely scenario is that if Russia is going to buy bitcoin – they will buy it in such a manner that does not inflate bitcoin price. Smartest decision would be to not play this event. It is bold to say that this is not going to influence markets use, however, an immediate bullrun, caused by a Russian investment, is highly unlikely. It is crucial to understand that Russian government has not confirmed this, thus, information is possibly published just to cause market FUD. Be smart and evaluate everything you read with rationale. Make sure to read bestcoininvestments news for unbiased analysis and news to dominate the markets!


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