By
Chimamanda U. Martha
April 18th, 2024
Fidelity aims to foray deep into the crypto market as the company files for a new Bitcoin-only fund for accredited and institutional players. The investment giant also published a survey showing rising institutional participation in the crypto market.
Fidelity Digital Assets, the cryptocurrency subsidiary of investment giant Fidelity Investments, is making bold moves to expand its crypto investment offering to institutional players. On Wednesday, August 26, director of digital funds at Fidelity Peter Jubber filed for a new Bitcoin index fund with the U.S. Securities and Exchange Commission (SEC).
Dubbed as “Wise Origin Bitcoin Index Fund I, LP”, the fund specifically targets institutional players putting high-value crypto bets. Involving institutional and accredited players, the pooled investment fund has a minimum investment of $100,000. The Bitcoin-only fund will be available only to qualified purchasers via registered investment advisors, family offices, and other institutions. In an email to Bloomberg, the company wrote:
“Fidelity has made a long-term commitment to the future of blockchain technology and to making digitally-native assets, such as Bitcoin, more accessible to investors.”
Fidelity’s announcement comes just at a time as more and more institutional players are warming to crypto investments. Moreover, Fidelity also has a close affinity towards Bitcoin. Last year in October 2019, Fidelity launched its physically-settled Bitcoin futures contracts in the market. The company Bitcoin Futures have received good response and participation from investors. Furthermore, Fidelity also provides secure digital assets storage facilities for investors.
The great thing about Fidelity products is that they are completely registered with the regulators. Thus, it removes the entry barrier for institutional players to park their money in the crypto market.
Fidelity Investments is also one of the biggest mutual funds and financial investment giants in the U.S. Currently, the company manages over $8.3 worth of customers’ assets in total.
With Its New Bitcoin Fund Fidelity Supports Rise of Institutional Participation in Crypto Markets
Before coming up with this Bitcoin Index Fund, Fidelity published a survey earlier in June 2020. The survey conducted between November 2019-March 2020, highlights the institutional interest in the crypto market. Having surveyed over 800 institutional players from across the U.S. and Europe, Fidelity made some interesting observations. The survey notes:
“Digital assets are gaining in favorability and appeal amongst institutional investors, with almost 80% of investors surveyed finding something appealing about the asset class. In a comprehensive survey of almost 800 institutional investors across the U.S. and Europe, 36% of respondents say they are currently invested in digital assets, and 6 out of 10 believe digital assets have a place in their investment portfolio”.
Thus, it is pretty clear why Fidelity is making such aggressive moves in the market. Currently, there are limited details available with respect to the fund. The relationship between Fidelity Digital Assets and Wise Origin is also unclear at this stage. As per Forbes, the company’s own subsidiary – Fidelity Brokerage Services LLC – will act as the fund’s custodian.
The company has also filed a trademark application with the name of Index Fund with the U.S. Patent and Trademark Office and is currently under review.