• Fidelity Investments is increasingly investing in cryptocurrency products, including offering Bitcoin in 401(k) plans, Ethereum trading, and commission-free trades.
• Fidelity anticipates having 500 employees working in its Digital Assets division by the end of March 2023.
• Cryptocurrency has transformed from a cutting-edge technology to an enormous bubble, with over $2 trillion in token market value lost and numerous cryptocurrency businesses filing for bankruptcy.
Fidelity Investments is looking to the future of cryptocurrency and banking on it. With the increasing range of its crypto products and programs, the privately held brokerage and mutual fund behemoth is pushing to be at the forefront of the space.
In November 2020, Fidelity launched a program to enable the use of Bitcoin in 401(k) plans that it manages. This further expanded in March 2021, when Fidelity enhanced its platform for institutional clients by adding Ethereum trading and real-time settlement. By the end of March 2023, Fidelity anticipates having 500 employees working in its Digital Assets division, with 28 available positions with “digital assets” in the job description listed on their website.
Fidelity’s goal for its 40 million individual investors may be to bring bitcoin to them. Customers can trade Bitcoin and Ether commission-free, starting “with as little as $1,” after signing up for the company’s wait list.
However, Fidelity’s timing is unfortunate. Over the course of the past year, cryptocurrency has transformed from a cutting-edge technology to an enormous bubble, with over $2 trillion in token market value lost and numerous cryptocurrency businesses filing for bankruptcy. The FTX scandal that broke over the summer only further highlighted the risks involved with investing in cryptocurrency.
Despite the risks, Fidelity is looking to capitalize on the potential upside of cryptocurrency. With its increased range of crypto products, the company is positioning itself as a leader in the space. While only time will tell whether this decision will pay off, Fidelity is confident in its future success.