The crypto-focused branch of the major asset manager is looking to grow its team with the addition of 10 new roles across blockchain and trading.
despite the 7,000 BTC heist at Binance, there is a lot to rave about. Of Note, Bitcoin
last touched the $6K mark at the middle of the last quarter of 2018. However, it
is what has happened between then and now that Bitcoin investors are confident
their investments will continue to appreciate, weathering minor dents like what
there have been exponential development in the last few years as Bitcoin as a
network beat odds, evolving into a leading, alternative platform, the Bitcoin
investors’ confidence is pegged on four attributes, according to an influential Crypto
Trader and Analyst. It was only last year when Bitcoin retested $6,000 but
during that time:
1. Square wasn’t selling Bitcoin
which is a mobile payment firm founded by Jack Dorsey who is also the founder
of Twitter, started supporting Bitcoin buying and selling from its Cash App in
late 2017. However, it was until towards the end of 2018 that Square expanded
the reach of the Cash App to include almost every U.S state.
the relief of Bitcoin investors, Square recorded $1.69 million in profits
during the third quarter of 2018.
2. Fidelity wasn’t storing Bitcoin
of Fidelity, a leading investment firm based in the U.S, supporting BTC have
been in the air for some time. Although they are still not confirmed, reliable
sources have indicated that the investment firm will launch Bitcoin custody
services for its institutional clients in the “next few weeks.” Recently, the
investment firm which has over $7.2 trillion in client assets under management,
formed the Fidelity Digital Services department to concentrate on Bitcoin among
other virtual currencies.
is this continued positive attitude by a significant traditional investment
firm that Bitcoin investors find solace.
3. TD Ameritrade wasn’t trading Bitcoin
Ameritrade, a leading US-based brokerage firm, started offering Bitcoin futures
on its platform. Last month, details emerged that the brokerage firm is
silently testing Bitcoin trading although only through its Paper Trading desk.
Nasdaq was also thought to be playing a background role in helping TD
Ameritrade conduct the tests. Apart from Bitcoin (BTC) the test also features
4. Lightning Network wasn’t holding 1,000
It was until mid-March this year that the Lightning Network (LN) was capable of holding 1000 Bitcoin. This made LN suitable for more than just conducting micro-payments. LN was created to solve the scalability issues on the Bitcoin blockchain. From the start, it was hailed as the best option for small payments in Bitcoin (BTC).
launch of the Lightning Network was applauded by Microsoft, Jack Dorsey, and
Bill Lee, a SpaceX and Tesla investor. This development makes Bitcoin investors
to hold onto their optimism that BTC is the next best choice they ever made.
think people underplay LN a little. It’s not so much that it holds loads of
BTC, it’s more that it takes a load off the blockchain usage. Every transaction
that goes through on LN, … is one that’s not clogging up the network.” Noted The_Great_Sarcasmo, a Redditor.
What the Bitcoin
social platforms, the crypto community completed the phrase, “The last time
Bitcoin broke the $6K level…” in both hilarious and serious ways.
For example, to express the current Tether and BitFinex fix, a Redditor noted that the last time Bitcoin broke the $6K level, “Tether was also ‘backed 1:1’ back then, and exchanges/CMC were faking volume.”
some disputed the inclusion of Fidelity and TD Ameritrade, others were more
“Two of those things aren’t true. Fidelity and TD Ameritrade made announcement…but the features aren’t available,” noted mindless_snail.
response bLbGoldeN noted, “they’re still true…those
weren’t the case last time.”
The crypto community was also concerned about the Binance security breach where 7,000 BTC was lost. However, from the comments it’s unlikely this is going to dampen the Bitcoin investors’ mood. For example, coolfarmer argued:
“Binance was not hacked: Hackers were able to obtain a large number of user API keys, 2FA codes, and potentially other info. The hackers used a variety of techniques, including phishing, viruses and other attacks. Many user accounts were hacked, by compromising the users themselves. The exchange itself was not hacked.”
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Fidelity To Soon Launch Bitcoin Trading
New reports, namely one from Bloomberg posted on Monday, divulge that the option to conduct Bitcoin (BTC) purchases and sales will soon be available on Fidelity Investments’ cryptocurrency division, the fittingly named Digital Asset Services. Those familiar with the matter told the outlet that “within a few weeks,” the institutional clientele will have access to the aforementioned solution.
Interestingly, it isn’t clear if Fidelity will be offering spot market trading, a darkpool/over-the-counter (OTC) solution, or a liquidity aggregator to its clients. Yet, as explained by a company spokesperson Arlene Roberts, the service, whatever form it will take, will be “focused on Bitcoin.” She further adds:
“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.”
This news comes just days after Fidelity unveiled an institutional survey they commissioned, which revealed that institutions are widely amicable towards the digital asset class.
As reported by Ethereum World News previously, out of the “more than 400 U.S. institutional investors” polled, 47% agreed that cryptocurrencies should have a place in their portfolios. Out of that pro-crypto group, which included pensions, family offices, crypto funds, and endowments, 72% noted that they would be most comfortable with holding digital asset funds, like the array of proposed Bitcoin ETFs and Grayscale’s GBTC. On the matter of why a cryptocurrency allocation is logical, the institutions among the 47% noted that they see cryptocurrencies as innovative technology and an asset class barely correlated with traditional markets (asymmetrical risk) and has “appealing characteristics”.
Potential Effect On The Crypto Market
While digital assets have barely budged off this news, with Bitcoin posting a mere 0.52% gain as of the time of writing this, some are sure that this news is decidedly bullish for the cryptocurrency market. In a recent CoinTelegraph episode, Mati Greenspan, eToro’s in-house crypto expert, noted that investors should keep their eyes on this development. Greenspan, eToro’s senior markets analyst, explains that although Fidelity likely isn’t the first services provider to offer cryptocurrency-related products, it is “very likely to be the biggest.”
On the matter of the trade execution service, the analyst explains that FDAS will be giving the broader market a catalyst to move “liquidity significantly forward,” thus making BTC more robust and more financialized. Quantifying the potential effect the new product could have, Greenspan suggests that even if Fidelity’s clientele allocates 1% of their assets into cryptocurrency, BTC could
This isn’t the only bullish catalyst that Greenspan drew attention to, however. In the aforementioned CoinTelegraph segment, the eToro analyst looks to the upcoming New York Blockchain Week, which is centered around CoinDesk’s Consensus conference; and technical factors to convince him that BTC is looking more bullish than not.
Title Photo by Fezbot2000 on Unsplash
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Fidelity is launching cryptocurrency trading service for institutional customers “within a few weeks,” according to Bloomberg source.
Financial services giant Fidelity hired Chris Tyrer, former head of Barclays’ digital assets project.
Fidelity Reveals Abounding Crypto Interest
All things considered, many common Joes and Jills would think that it is irrational for institutions to be delving into digital assets. According to a recent survey conducted by Fidelity Investments’ Digital Asset division, however, such investors are clamoring for crypto and blockchain, Bitcoin (BTC) included.
In a recent Medium post and accompanying document, the Boston-based firm revealed that more than 22% of institutional investors that they surveyed, which includes endowments, family offices, industry funds, traditional hedge funds, and so on and so forth, already have “some exposure” to digital assets, with many of said investments occurring within the past 36 months. What’s more is that 40% of the “more than 400” surveyed, which are all U.S.-based, intend to look into crypto-related investments over the next five years.
And even more notably, 47% of those surveyed were amicable towards the idea of having cryptocurrencies or related vehicles in their current portfolio structures. Interestingly, out of the institutions that fell into the category, most preferred the idea of purchasing a crypto-backed investment vehicle. This, of course, signifies the importance of a vehicle like a Bitcoin ETF.
Speaking on the importance of data, Tom Jessop, the resident crypto exec of Fidelity, explained:
We’ve seen a maturation of interest in digital assets from early adopters… More institutional investors are engaging with digital assets, either directly or through service providers, as the potential impact of blockchain technology on financial markets – new and old – becomes more readily apparent.
The reason why such demand has been seen is, according to the poll, a result of institutional interest in innovative technologies, of which crypto is a key facet of, a need for non-correlated assets, like Bitcoin, and a demand for the characteristics that digital assets sport, which likely include decentralization, censorship-resistant, low-fee, rapid transfer finality times, and so on.
All this comes as Bitcoin and the space at large have commenced a notable recovery. The value of BTC, for instance, is up 43% since January 1st, and volumes, both on spot markets and on the CME’s futures contract, are up even more. Money from venture capital firms and capital from traditional industries have continued to flood into the ecosystem, as made evident by multi-million dollar deals that Bakkt, ErisX, among others have closed.
Retail Investors May Soon Be Joining Institutions
Retail investors may soon be joining institutions though. Over recent weeks and months, renowned corporations across the globe have announced plans to establish cryptocurrency products and services, which should catalyze the mainstream acceptance of this asset class. Most notably, reports claimed that ErisX, an up-and-coming, Chicago-based cryptocurrency initiative will soon launch its own exchange platform. This is notable, as TD Ameritrade, a large American retail-centric institution, is expected to support in-house Bitcoin and other cryptocurrency purchases and sales through ErisX, opening the door for eleven million consumers to finally down the blockchain pill. And E*Trade is expected to make a similar move. But will they bite?
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United States-based asset management firm Fidelity Investments released the results of a survey showing that 22% of institutional investors already own digital assets.
United States-based asset management firm Fidelity Investments released the results of a survey showing that 22% of institutional investors already own digital assets, in a press release published on May 2.
The release claims that the firm surveyed 411 U.S. institutional investors among which 40% of respondents said that they are open to future investments in digital assets in the next five years. Furthermore, almost half (47%) of respondents said that they see a place for digital assets in their investment portfolios.
Most investors (72%) prefer to buy crypto investment products, while 57% prefer to buy crypto assets directly and another 57% prefer to buy an investment product that holds digital asset companies. Tom Jessop, president of Fidelity Digital Assets, commented on the findings:
“We’ve seen a maturation of interest in digital assets from early adopters, like crypto hedge funds, to traditional institutional investors like family offices and endowments.”
When it comes to the reason behind their interest in digital assets, 46% of respondents find the low correlation to other assets to be crypto’s most appealing characteristic. Financial advisors (74%) and family offices (80%) reportedly view the features of digital assets most favorably.
On the other hand, unclear regulation, volatility, limited track record and lack of fundamentals were cited among the obstacles to investing in digital assets.
As Cointelegraph reported earlier this week, a former executive of British investment bank Barclays, Chris Tyrer, has joined Fidelity Digital Assets, the crypto platform of Fidelity Investments.
Coinbase’s director of institutional sales, Christine Sandler, has left the crypto exchange for Fidelity Investments, sources said.
New York Firm Launches Crypto Offering
2018 may have seen Bitcoin (BTC) fall by over 70%, but institutions and powerhouses in traditional industries are still actively seeking to get their foot into the crypto door. CoinDesk reports that blockchain-friendly IBM, one of the largest forward-thinking technology companies across the globe, has quietly entered into the cryptocurrency custody space with a little-known partner.
The outlet’s Ian Allison writes that Shuttle Holdings, a New York-headquartered investment group, will be launching custodial services for this newfangled asset class sometime in late-March. Shuttle has purportedly built the offering on IBM’s private cloud service, backed by the Corporate America darling’s encryption technology. It is important to note that Shuttle is offering the tools for cryptocurrency custody, rather than handling the nitty-gritty itself.
Much like other institutional plays in this budding space, Shuttle has started small, offering its solution to a hand-picked list of clients that it believes can handle the cryptocurrency stress. Eventually, however, the company intends to see banks, brokers, custodians, family offices, along with other institutional subsets dabble in the storage of cryptocurrency.
Shuttle and IBM’s venture is not exactly what Bitcoin traditionalists would call cold storage. As hinted at earlier, private keys will be stored not on a device in a vault, but in the cloud (private that is) and secured by a number of layers of industrial-grade encryption. In a presentation at an IBM event, Shuttle’s Brad Chun explained that it sought to harness this method of custody as firms need their cryptocurrency often at a moment’s notice, with a digital system being much more efficient in that regard. He even states that by some measures, Shuttle’s tools will be “just as secure, if not more secure” than regular cold wallets, some of which were proven to have massive security vulnerabilities over recent months. Explaining more about the project, Chun told CoinDesk:
“There are always trade-offs between security and efficiency, but we do not utilize a traditional cold storage system. Instead, we keep keys at rest encrypted in multiple layers as data blobs so that an organization can store these backups using their pre-existing disaster recovery and backup processes and media.”
Interestingly, Chun mentioned that he attempts to push Shuttle’s custody service to eventually service real world asset-backed tokens, like those for real estate (land titles), shares of both private and public standing, among others. As Anthony Pompliano, Jeremy Allaire, among others are pushing for a tokenized world, this may only make sense.
This offering comes after IBM’s blockchain head, Jesse Lund, told reporters that he expects Bitcoin to end the year at $5,000 before skyrocketing to $1 million as time elapses.
Custody: A Growing Trend
This, of course, only underscores the industry trend of custody of digital assets. Per previous reports, it has been officially confirmed that Fidelity Digital Asset Services (FDAS), the first fully-fledged crypto platform backed by Wall Street, has gone live. In a number of interviews with cryptocurrency outlets this week, Tom Jessop, a former Goldman Sachs executive turned head of FDAS, explained that his brainchild’s offerings are live for a select list of “eligible clients.” Jessop adds that at the moment, the platform only supports Bitcoin, and will be staving off its verdict on Ethereum due to impending blockchain upgrades.
Photo by Annie Spratt on Unsplash
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Bitcoin First, Ethereum Later
At long last, Fidelity’s cryptocurrency subsidiary, the fittingly-named Fidelity Digital Asset Services (FDAS), is nearing a full launch. FDAS chief Tom Jessop, formerly of Goldman Sachs, Standard & Poor’s, among other Wall Street institutions, touched on the subject matter in an interview with CoinDesk. He told the outlet that while the branch’s advent is nearing, they have yet to integrate Ethereum (ETH).
Jessop remarked that his organization has created an evaluation process for cryptocurrencies, likely much like Coinbase’s, in a bid to support bonafide projects with potential. Currently, FDAS has only given Bitcoin (BTC) its stamp of approval, even though Jessop has stated that Ether and other popular cryptocurrencies may see support eventually. He elaborated:
We’re currently supporting bitcoin, we have designs to support other coins over the balance of the year center to various criteria including our [in-house selection framework], where we obviously look … at client demand and other things.
These “other things,” which are universally applied to other assets, like Ethereum, include the decentralization status of a coin (presumably the number of nodes/miners, consensus mechanism, hashrate distribution), the level of demand from the Boston-based firm’s clientele, the peculiarity of the blockchain, which would affect how FDAS integrates the asset. While Jessop did hint that his crypto firm’s clients have expressed interest in Ethereum-related services, he noted that with upcoming hard forks/blockchain upgrades, like this October’s Istanbul or the following years’ steps towards Serenity, Fidelity may need to “see how those things work out.”
If Jessop is serious, that means that ETH services may not launch on FDAS until late 2019, months after the initial launch of the startup. But to give his reasoning some more credence, he drew attention to Ethereum Classic, which suffered a 51% attack to its blockchain earlier this year. While the same isn’t likely to occur to the ETH chain, Jessop & Co. may be worried about the stability of the chain following a further step towards PoS (which miners may find contentious).
Crypto Services Live For Eligible Clients
While the lack of Ether support may irk some of Fidelity’s thousands of institutional clients, the bottom line is that the service is live. A recent tweet from the Wall Street-backed startup corroborated this. Citing a company update which Ethereum World News reported on previously, FDAS revealed that it is now live, or at least in a limited capacity. The firm tweeted the following seemingly in tandem with the Coindesk report:
Moving ahead into 2019, Jessop intends to see his firm scale, specifically in a bid to see FDAS consume 90% of the States’ institutional crypto market. He claims that this scaling will take the form of regulatory green lights, along with ironing out any bugs in the platform. This will be of utmost importance, as the FDAS head noted that Fidelity has seen a “significant amount of demand” in regards to cryptocurrencies, from crypto-native firms to hedge funds.
This could finally be a positive sign for this market moving forward. Just yesterday, prominent analyst The Crypto Dog took to Twitter to lay out a number of reasons why Bitcoin bears shouldn’t, well, be bearish. A primary facet of his list, which includes Binance’s ventures, Argentinian government blockchain involvement, and Bakkt’s (potential) Starbucks integration, was the launch of Fidelity’s cryptocurrency arm. CNBC contributor Brian Kelly touched on this too, explaining yesterday that this is one reason why it appears that the “crypto winter” is starting to thaw.
Title Image Courtesy of Descryptive.com Via Unsplash
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