Fidelity one of the largest mutual fund companies in the United States is taking steps to legitimize cryptocurrencies as an asset class. The company announced it would establish custodial services for Bitcoin and other cryptocurrencies. Fidelity will also handle execution services for these cryptocurrencies.
The CEO and Chairman of Fidelity Abigail Johnson have been an outspoken proponent of cryptocurrencies. Initially, the digital asset services will be available to hedge funds and institutional investors and not to retail investors.
It has been an enormous challenge to bring in Institutional Investors to the crypto market, and the entry by Fidelity will be a much-needed vote of confidence. The company will focus on security which has the biggest problems facing cryptocurrencies and the exchanges. This will establish much-needed security standards that will be a blueprint for other firms going forward.
The company will also be able to set standards for counterparties the most important of these would be the financial strength of the counterparty. Trade execution standards will be in place fair trading.
Institutional Investor interest in cryptocurrencies has never been more significant even though Bitcoin and cryptocurrencies have been in a sideways market most of the year.