Fidelity Launches Cryptocurrency Platform for Institutional Investors
Throughout this time high profile institutional clients were looking to buy anywhere from 100,000 BTC up to 1 million BTC just so you can visualize 1 million BTC is almost 5 percent of the total Bitcoin supplying the Bitcoin price movement did not seem to have any impact on this request there was a New York City private investment bank looking to buy five hundred thousand BTC to test the waters and a us-based family office looking for 1 million BTC to get the things going and a public bank looking for 1 million BTC asking to transact outside the US the OTC buyers generated enough demand to buy every single Bitcoin in the market needless to say none of those deals went through broker would have been very pleased if those deals would go through since the fees are between 0.25 to 1% of a total amount and if you do the math ones profits could be very significant
So there are several parties that all want to do business and expect to make large profits by doing
So Why do these transactions fall through?
Although there is no official data about these transactions I am confident that there has never been a transaction done nearly of 100,000 BTC the part of the equation that I intentionally left out is sellers none of the sellers that were claiming to have that quantity of Bitcoin actually had it or at least none of them were willing to provide evidence in a way that would satisfy buyers concerns additionally the talks tend to break down because the two sides can come to an agreement on the procedures
This part may seem trivial to an outsider but it is not let's say we have party a that wants to sell 100,000 bitcoins and a party B that wants to buy them a party a will not send their bitcoins until they receive a payment from B because once they do send it there is no way to reverse it on the other hand party B is also reluctant to send their share because they are afraid of getting defrauded a buyer wants to see proof before they provide the funds and the seller does not want to send bitcoins because either he is afraid of getting hacked or because he doesn't have the coins
The most common solution to this problem is an escrow agent however good old-fashioned escrow agents do not understand these type of transactions as they don't understand how Bitcoin works most of them do not even have the most basic understanding of how to confirm a Bitcoin transaction they are also afraid of this crypto space and generally new crypto escrows agents lack credibility when established escrows move into this space they typically don't provide Bitcoin escrow they will only escrow the fiat because of these difficulties the news that fidelity investments is getting into crypto business is huge
Fidelity launches platform for institutional crypto trading according to CNBC one of the biggest names in financial services wants to help institutional investors add Bitcoin and other cryptocurrencies assets to their multibillion-dollar portfolios there is high institutional demand for cryptocurrency products fidelity investments the fifth largest asset manager in the world with 27 million clients and seven point two trillion dollars and customer assets has announced that it will launch a separate company to provide cryptocurrency custody and trade execution services for institutions dubbed fidelity digital asset services CNBC reports that the company will serve as a bridge between institutional investors and help financial institutions satisfy their high demand for Bitcoin and other cryptocurrencies
If these plans come to reality it may imply that finally the demand exhibited by institutional investors will be satisfied at least partially although it is still unlikely that we'll see millions of bitcoins changing hand on a daily basis but in the future I won't be surprised if we see such large transactions this may not only lead to the Bitcoin price rising short-term but could eventually change the long-run equilibrium by shifting the real Bitcoin supply curve to the left as many of the institutional investors are looking to hold it long-term as new gold so I think it is a great time to get more bitcoins before institutions raised
Fidelity investments chairman and CEO Abigail Johnson said in a press release
"our goal is to make digitally native assets such as Bitcoin more accessible to investors we expect to continue investing and experimenting over the long term with ways to make this emerging asset class easier for our clients to understand and use"
The new venture will be led by Tom Jessup who spent 17 years at Goldman Sachs before joining blockchain start-up chain as president in 2017 and then fidelity in 2018 as head of corporate business development
Jessop told CNBC
"we saw that there were certain things institutions needed that only a firm like fidelity could provide we've got our new technology from fidelity and we can leverage all the resources of a big organization"
CCN reported earlier this year the fidelity appeared to be building a cryptocurrency exchange as the firm had advertised internally for developers to help build a digital asset exchange departing from the public comments of many CEOs in the mainstream financial industry Abigail Johnson not only attended a cryptocurrency conference last year but also told the audience that she was a believer in the technology that open stance has enabled fidelity to position itself as a potential leader in the cryptocurrency market which has reportedly begun to attract major university such as Harvard and Yale
Jessup continued in the CNBC interview
"you might look at the crypto world and say wow is this a new thing but we've been managing key materials for a long time we took our learnings and how to run enterprise security then through our exploration of Bitcoin and some of the people we've hired quickly developed some of the crypto native expertise and federated the two those things"
Fidelity joins a growing list of legacy financial Giants who have seen enough potential in the cryptocurrency space to justify investing in the resources and produce different financial products IntercontinentalExchange ice Goldman Sachs Citigroup and Morgan Stanley are just a few of the names that plan to roll out digital asset services within the near future of course the 2018 bear market may have discouraged most of the people in the space Barclays as CCN reported recently is said to have quietly placed its cryptocurrency trading desk project on ice while Goldman Sachs postponed its trading desk plans to prioritize a crypto asset custody service fidelity though has not been discouraged by the massive drop in prices that has occurred over the past 10 months
Jessup concluded
"no one said when some of these early-stage internet company in 2000 were going out of business G the internet is toast we don't focus too much on the price it's a foundational technology people are trying to get exposure to the trend and expect volatility in the assets themselves"
This is the end let me know what do you guys think about fidelity launching its new platform to satisfy demand of institution investors leave your thoughts in the comment section below