By Investment firm Fidelity’s “Fidelity Digital Assets Services” has officially gone live after being formed late last year and the digital asset arm of the firm is fully operational with an increase in institutional investor interest. This increased interest comes at an unexpected time with the crypto ecosystem’s current bear market.
According to research from Fidelity, this pattern is more than likely to continue.
Fidelity Digital Assets Services Goes Live:
Tom Jessop, head of Fidelity Digital Assets, at the DC Blockchain Summit recently revealed to the media that the firm’s new branch is indeed live and fully operational. Fidelity is an investment firm with over seventy years of experience with its core services being retirement plans and mutual funds.
Last year it was reported that the firm spends an astounding $2.5 billion on AI and other emerging technologies such as blockchain.
Also launched in 2019 was the firm’s digital assets custody branch – Fidelity Digital Assets. The new branch oversees the safe and secure storage of digital assets as well as trading.
As reported by CoinBeat, Fidelity has also been acquiring a variety of institutional investors including hedge funds, family offices and dedicated crypto funds.
As per a statement from Jessop, the current crypto bear market “hasn’t had an impact” on the launch of Fidelity Digital Assets.
It’s common knowledge to all crypto enthusiasts that the volatility of the industry has lead to significant losses. Last year, more than $20 billion was injected into Initial Coin Offerings (ICOs) but according to the current market capitalisation in the crypto ecosystem close to 90% of these funds have all but disappeared.
Despite this, Jessop claims that institutional investors have continued to express interest in investing cryptocurrencies.
Increased Investor Interest In Digital Assets:
Fidelity conducted extensive research, interviewing a staggering 450 institutions, hedge funds, pensions, endowments as well as wealthy families with 22% of interviewees claiming that they’ve already invested in cryptocurrencies. Furthermore, those who already have invested claimed that they expect to double their stake in the crypto market within a half-decade window.
Jessop claims that the recent drop in the crypto market hasn’t diminished interest from institutional investors:
“If anything, they are as encouraged now as they were when prices were higher.”
Notably, the arrival of security tokens has played a significant role in the ever-growing interest from institutional investors. Unlike ICOs, Security Token Offerings (STOs) openly class themselves as securities thus abiding by current securities laws.
This regulatory safety which is tied to security tokens is why this asset class has already attracted other institutional big names such as NASDAQ who also entered the market via Symbiont. Despite security tokens being relatively new, tokenised assets already include equity, investment funds, real estate and more.
However, it must be noted that not all institutional investors are ready to make the jump to digital asset investments. Those who remain hesitant do so because of volatility and lack of education according to Jessop.
That being said, Jessop indicated that the more a firm knew and understood about blockchain and crypto the more likely they were to invest:
“They’ve approached us wanting to learn, which is an encouraging sign.”
Just what does the arrival of an institutional giant such as Fidelity, in the cryptocurrency space mean for the crypto and blockchain community? Only time will tell, but for now, it sure seems like great news for mainstream adoption.
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