Why Investment Giant Fidelity May Allow Bitcoin Trading
Fidelity Investments may provide its clients with access to Bitcoin trading through its brokerage platform, according to a report from The Wall Street Journal. The firm has been heavily involved in crypto markets, and has already announced products that will give its wealthy clients exposure to the cryptocurrency.
The new strategy will potentially expand the firm’s Bitcoin offering to its 34.4 million brokerage accounts, per sources cited by The Wall Street Journal. The strategy was hinted at by Galaxy Holding, one of Fidelity’s biggest clients, CEO and crypto bull Mike Novogratz.
In a speech to the SALT conference, Novogratz stated the following, the report claims:
A bird told me that Fidelity, a little bird in my ear, is going to move its retail clients to crypto soon enough. I hope that bird is right. And then we see this institutional march.
The potential offering has not yet been disclosed to the investment firm’s clients, but like other banking and financial institutions, Fidelity has stated that demand for Bitcoin and crypto exposure is driving these offers.
Loyalty under scrutiny for their Bitcoin offering
In recent months, Fidelity has been under the radar of US government officials as the company aims to expand its Bitcoin offering and products. As Bitcoinist reported, a group of US senators led by Elizabeth Warren sent a letter to Fidelity CEO Abigail Johnson.
Government officials questioned the product, and a potential violation of instructions issued by the US Department of Labor to allow 401(k) accounts to gain Bitcoin exposure. These accounts are used by a large majority of US citizens to save for retirement.
In that sense, the senators considered Bitcoin and crypto assets unworthy of being used as a long-term investment. The letter classified the nascent asset class as “volatile, illiquid and speculative”. The document said:
While we appreciate Fidelity’s efforts to help working Americans achieve a more secure retirement, this decision is extremely troubling. Perhaps most disturbingly, by pointing out the risks of investing in Bitcoin on its website and planning to limit participants’ Bitcoin exposure to 20 percent, Fidelity acknowledges that it is well aware of the dangers associated with investing in Bitcoin (… ).
It remains to be seen whether the strategy of offering Bitcoin trading to its brokerage accounts will attract the same level of attention from US government officials. At the time of writing, BTC’s price is trading at $22,400 with a profit of 4% in the last 24 hours.
