Fidelity & Mike Novogratz's Galaxy Digital Partner on Institutional Crypto Custody and Brokerage Solution
One of the main Wall Street companies is now eyeing the crypto market. Fidelity, a $2.5 trillion asset manager, has decided to dive in the crypto world with a new product.
Fidelity is well-known for its retail-brokerage services and 401(k) offerings but now the company is starting to pay more attention to the crypto solutions. Most of the new services will be offered via Fidelity Digital Assets, a new entity in partnership with Mike Novogratz's Galaxy Digital, created to manage these new products.
— Michael Novogratz (@novogratz) October 15, 2018
Tom Jessop was recently interviewed by The Block Crypto and he talked about the move from the company. According to him, the initial custody solutions will be focus on Bitcoin and Ether while the company is still planning new assets. The trading part of the new product will be provided by ‘white glove' services to asset managers.
According to Jessop, Fidelity will act as the broker for the clients while it routes orders to the OTC desks of the firm to find the best prices for clients. The company has already working in the products for quite some time and claims to be ready to announce more products if there is enough demand for them.
During the interview, Jessop has affirmed that the company has been focused in taking its time in the last 6 to 9 months to build and elevate the services to a level in which they can go to the market and achieve some success. The new products will be more focused on institutional investors than retail ones.
Platform Will be Launched In 2019
Jessop has affirmed that this new platform will be launched in 2019 during an announced made in the Bloomberg LLP and Galaxy Digital conference. There were hints that the company would follow this path way before the announcement, though, as Abby Johnson, the CEO of the company, has been a crypto enthusiasts for quite some time now.
Fidelity has started to research the crypto market in 2014 and examined mining in 2015, but it was only at the end of 2017, according to Jessop’s interview, that the company really had found the space to look for investor in the institutional space.
Tom Jessop believes that the market will grow a lot when people are able to see beyond the hype and the market actually reaches the point in which it will have matured completely. According to him, you have to educate people beyond the point in which they open their eyes to the real potential of cryptos.
The Block Crypto has also reported that, due to its size, Fidelity might have an edge when compared to some smaller providers of institutional custody solutions like Coinbase and BitGo. As the market still needs reliable solutions for investors of this type, there is a clear space for Fidelity to carve its place in the market and grow beyond the efforts of companies like Coinbase.
Fidelity is also set on offering brokerage solutions, a market in which companies like Coinbase are still trying to break in but without much success at the moment.