4th November 2022 > > Fidelity.

tl;dr

Yet more crypto adoption by the legacy financial system.

Market Snap

Market Wrap

Risk markets seemingly in fine fettle this morning, allowing the central bankers of both the US and the UK to bask in their own self-congratulation, blinded by their own sheer incompetence.

Curious Cryptos’ Commentary – Fidelity and crypto adoption

Fidelity, an AM (Asset Manager) with close to $4.5 TRILLION of AUM (assets under management), frequently crops up in these scribblings as it continues to embrace the crypto revolution.

Though shy of Blackrock’s $10 TRILLION AUM, this safely puts them in the top three or so of AMs, making them an important conduit into the retail market. And the company is soon to bring cryptos to an app near you:

https://www.fidelity.com/crypto/trading

Starting with BTC and ETH (with plans to later expand the population of cryptos), the capability for retail investors to invest in cryptos will be offered alongside the current stock offering, with 0% commission (*).

Fidelity’s 34mm retail investors will also have access to a suite of educational material.

This initiative makes light work of the three key barriers to entry for retail investors in crypto – ease of execution, pricing transparency (the bid-offer spread is capped at 1%), and the most pressing problem of all, custodial risk.

Fidelity is not doing this simply for the sake of doing so – it is investing hard cash and senior management time in this product because they know they have the demand for it amongst their current client base, presumably buoyed by the hope of attracting new retail clients who do not yet have this option.

Increased demand with rapidly slowing supply (the next halvening is remarkably now just 18 months away) means only one thing for prices in the medium term.

Which legacy financial institution will be the next to follow? Come on Blackrock, you know you want to.

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(*) This is simply a marketing ploy, like that of the old-school FX desks in airports. The margin is in the bid-offer spread.