Why Investment Giant Loyalty Could Allow Bitcoin Trading

Fidelity Investments may be giving its clients access to Bitcoin trading through its brokerage platform, according to a Wall Street Journal report. The company has been heavily involved in cryptocurrency markets and has already announced products that will provide its wealthy clients exposure to cryptocurrency.

The new strategy will potentially expand the company’s Bitcoin offering to 34.4 million brokerage accounts, according to 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 said the following, the report claims:

A bird told me that Fidelity, a little bird in my ear, is going to shift their retail clients to crypto pretty soon. I hope this bird is right. And so we see this institutional course.

The potential offering has not yet been disclosed to the investment firm’s clients, but like other banking and financial institutions, Fidelity said demand for Bitcoin and exposure to cryptocurrencies is driving these offers.

Loyalty under scrutiny for Bitcoin supply

In recent months, Fidelity has been on 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 requested information about the product and a possible violation of guidelines issued by the US Department of Labor to allow 401(k) accounts to gain exposure to Bitcoin. These accounts are used by the vast majority of US citizens to save for their retirements.

In this sense, the Senators judged Bitcoin and cryptocurrencies, assets that were not worth using as a long-term investment. The letter classified the nascent asset class as “volatile, illiquid and speculative.” The document stated:

While we appreciate Fidelity’s efforts to help working Americans achieve a more secure retirement, this decision is extremely troubling. Perhaps most troubling, by highlighting the risks of investing in Bitcoin on its website and planning to limit participants’ exposure to Bitcoin to 20 percent, Fidelity is acknowledging that it is well aware of the risks associated with investing in Bitcoin (…).

It remains to be seen whether the strategy of offering Bitcoin trading in its brokerage accounts will attract the same level of attention from US government officials. At the time of writing, BTC price is trading at $22,400 with a gain of 4% in the last 24 hours.

BTC price with small gains on 4-hour chart. Source: BTCUSDT Tradingview

Leave a Comment