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Fidelity plans to offer brokerage customers Bitcoin exposure as institutional clients maintain BTC interest despite the bear market.
Financial services company Fidelity Investments is considering letting individual brokerage customers trade Bitcoin (BTC). Sources close to Fidelity said the firm would soon migrate its retail customers to cryptocurrency.
On Monday, the CEO of Galaxy Digital Holdings Ltd, Mike Novogratz, hinted that a source revealed Fidelity’s plan to him. During his speech at the SALT Conference, Novogratz said he hopes the information about Fidelity’s plan is accurate. At the moment, Fidelity Investments has over 34.4 million individual brokerage accounts. The company also has investor centers in over 140 locations in the US.
Earlier this year, Fidelity announced plans to allow its corporate clients to deposit Bitcoin in their 401(k) retirement savings account. The firm intends to enable its customers to invest directly in Bitcoin without creating a crypto account on any exchange. However, the US Labor Department expressed serious concerns about Fidelity’s Bitcoin plan for 401(k) retirement accounts. Speaking in an interview with the Wall Street Journal, acting assistant secretary of the Employee Benefits Security Administration, Ali Khawar, said:
“We have grave concerns with what Fidelity has done.”
Khawar pointed out the speculative nature of cryptocurrency as a major concern. He argued that crypto has intriguing use cases that need to mature before use for a retirement savings account plan.
Fidelity Plan to Allow Individual Brokerage Trade Bitcoin Could Face Stiff Opposition From Authorities.
Some US Senators openly criticized Fidelity’s plan to include Bitcoin in its retirement savings account. The rumored plan would most certainly come under serious scrutiny and resistance. A few months ago, Sen. Elizabeth Warren and Sen. Tina Smith wrote letters questioning Fidelity about the appropriateness of its Bitcoin 401(k) plans. The letters agreed with concerns the US Labor Department raised earlier about Bitcoin’s appropriateness as a store of value. Senator Dick Durbin previously implored US regulators to research the crypto industry thoroughly. Durbin said:
“Families and businesses in America will pay the price for crypto’s mining ventures.”
Fidelity manages retirement accounts for at least 23,000 companies in the United States. The company said its plan to allow Bitcoin deposits into retirement accounts shows its commitment to expanding its digital assets offerings. The President of Fidelity Clearing Canada, Scott Mackenzie, said that “the demand for investing in digital assets is growing considerably and institutional investors have been looking for a regulated dealer platform to access this asset class.”
BlackRock Leads the Line in Granting Customers Access to Crypto
Fidelity’s move to allow individual brokerage customers to trade Bitcoin follows BlackRock’s (BLK) partnership with Coinbase (COIN). The American-based multinational investment company, BlackRock, seeks to allow its institutional customers access to trade cryptocurrency. The deal will allow customers of the two companies access crypto trading, prime brokerage, custody, and reporting capabilities. According to Coinbase President Emilie Choi, “BlackRock’s deep expertise in investment management technology, combined with Coinbase’s integrated and secure trading, custody and prime brokerage products suite will facilitate greater institutional access and transparency to digital asset investing.”
BlackRock customers will gain access to Bitcoin through the company’s investment management platform, Aladdin. In the second quarter of this year, BlackRock had $8.5 million in assets under management. On the other hand, Aladdin has over 200 institutional users, including pensions, insurers, corporations, asset managers, banks, and official institutions.