Fidelity: The First of Many
Fidelity Investments announced the launch of a new company specifically for the purpose of easing institutional cryptocurrency investment, dubbed Fidelity Digital Asset Services. This is no small event, considering it is the first US-based Wall Street “incumbent” to offer such services, including the custody of digital assets like Bitcoin and Ether.
Institutional investment has been knocking on the door of cryptocurrency for some time now, but has been held back by the major problem of custody. These massive institutions simply cannot tolerate an uncertain degree of security when it comes to holding private keys safely. With the development of greater security availed via large cold-storage vault solutions and the possibility of insurance protections for assets held in custody of a third party, like those offered in the case of the Winklevoss brothers’ Gemini exchange, we may see a tidal change over the coming weeks, especially considering the launch of yet another institutional-scale crypto asset exchange, Bakkt, is also approaching.
It may take some time for price pressure to work its way down to retail trade, as much of the larger-scale trading is completed via OTC — without the need to ever go through the highly visible market-influencing traffic of exchanges. However, as supply diminishes and demand grows, the inevitability of upward price movement becomes more apparent.
These new behemoth traders will undoubtedly cause market pressure to increase — it just might take longer than impatient crypto traders hope it will. Institutional trading readiness and regulatory progress will continue to trudge on, slowly building as embattled traders, eager to wake Bitcoin and the larger market from its bearish hibernation, continue to hold and anxiously await the deluge.
It’s coming. This is just the first of many to contribute to the upcoming flood.