The absence of custody services in cryptocurrency keep many important players outside the game.
Fidelity Investments is focusing to launch their bitcoin custody service in March, according to a report published yesterday from Bloomberg. A thing that might facilitate the process of entering of new players who actually fear trading cryptocurrencies.
The project aims to build a trading platform and is supported, among others by billionaire VC fund Tim Draper.
In October, Fidelity reported that it would offer many crypto products focused mainly on large investors and hedge funds. According to the representatives’ announcement, Bitcoin custody will be the first product but Ethereum custody will be added later:
In a statement announced Tuesday, the company declared:
“We are currently serving a select set of eligible clients as we continue to build our initial solutions. Over the next several months, we will thoughtfully engage with and prioritize prospective clients based on needs, jurisdiction and other factors.”
The custody is a common financial product in financial markets when a third party holds the securities in order to diminish the risk of being lost or stolen. Cryptocurrencies are constantly stolen from hackers also because of the complex nature cryptocurrencies have many institutional investors are not comfortable with the risk involved investing in cryptocurrencies. Many players are testing the field of crypto custody services like JP Morgan Chase, Bank of New York Mellon Corp, and Northern Trust Corp. Fidelity might fill this important necessity the cryptomarkets have.
Constancy Chief Executive Officer Abigail Johnson has been a defender of cryptocurrencies, unlike her homologs in other companies who are not friendly to crypto. The company started mining bitcoin in 2015 and Fidelity Digital Assets will attract clients from Wall Street with their custody services.
Fidelity which is one of the biggest providers of retirement plans, investing and Brokerage services, Aims to use their big name and take the biggest share of institutional investors in cryptocurrencies offering their custody service. They already serve more than 13,000 financial institutions and the launch of their product could have a massive impact on crypto.
The launch of Fidelity might be even bigger that Bakkt. The two firms are competing for the big institutional investors. Fidelity has an advantage that their name is well known unlike Bakktwhichh is a brand new name that even important investors will take time to understand what is Bakkt and what they do.
Meanwhile, these two giants are running head to head in the crypto race, it is interesting to see who will be the first to launch and how this will impact the crypto markets.