Fidelity Investments Staffing up to Launch Crypto Exchange: Report

  • US investment giant Fidelity Investments is reportedly looking to launch its own cryptocurrency exchange
  • This according to job postings the firm sent its employees, whichreveal it's looking for staff that can help it launch the platform.

US investment giant Fidelity Investments is reportedly looking for talent to help it launch a cryptocurrency exchange that will allow its clients to “buy and sell certain digital assets.” Sources familiar with the matter purportedly revealed the firm has been working on the project for over a year.

According to Business Insider the wealth firm, which manages over $2.5 trillion in assets, has sent employees job postings that reveal it is looking for a DevOps system engineer to “help engineer, create, and deploy a Digital Asset exchange to both a public and private cloud.”

Moreover, the company is looking to staff up its crypto division, the Fidelity Digital Asset Services unit, with workers that can develop a “first-in-class custodian services for Bitcoin and other digital currencies.”

The report cites unnamed sources said to be familiar with Fidelity’s crypto ambitions. While right now Coinbase users can use Fidelity’s platform to check their portfolios alongside other investments, the move would likely see Fidelity directly hold cryptocurrencies.

While launching a cryptocurrency exchange would be one of the biggest moves a prominent Wall Street firm has made into the crypto market, it would put Fidelity Investments in competition with other industry giants, including Coinbase, investment app Robinhood, and Goldman Sachs-backed Circle, which recently acquired Poloniex for $400 million.

At press time, it isn’t clear whether Fidelity Investments’ new cryptocurrency exchange would be available on the firm’s main platform, or whether it would be launched as a separate entity. Similarly, there’s no available information on when it’s set to be launched.

According to Dave Weisberger, a market structure specialist, Fidelity’s move may be a smart one, as it will help legitimize the market and would strategically make sense. He said:

"They have many of the components already: a significant retail footprint across the spectrum of active to less active traders, a prime brokerage area that knows how to account for custody of assets, they operate an ATS already (called 'CrossStream'), and have a reputation for excellence and risk control in their product offerings.”

Dave Weisberger

It’s worth noting Fidelity Investments’ chief executive officer, Abigail Johnson, is a well-known bitcoiner. Last year, she revealed the company internally experimented with cryptocurrencies, and even launched a small mining operation that was “actually making a lot of money,” despite only being there for educational purposes.

At the time, Johnson revealed she is a “believer,” and that she was one of the few “from a large financial services company that has not given up on digital currencies.” The company’s charitable wing, Fidelity Charitable, raised over $22 million in bitcoin last year. At press time, it still allows philanthropists to donate using the flagship cryptocurrency.

Coinbase Explains Why 'Blue-Chip Asset' Bitcoin Is 'So Dominant'

Siamak Masnavi

Yesterday (May 13), digital asset exchange Coinbase's Justin Mart published a blog post in which he analyzed Bitcoin’s "continued dominance alongside Coinbase customer behavior."

Mart started by looking at Bitcoin's market dominance over the past four years.

Coinbase Blog Post Chart 1 on 14 May 2020.png

Mart then noted that although "Bitcoin’s position as the blue-chip asset has remained unchallenged," they "see a trend where bull markets show increasing traction among alternative assets," and he explained one possible reason for this:

"This could be for a variety of reasons, but one is largely psychological.

"As people feel good about their initial crypto investments (into Bitcoin), they branch out to find other possible categorical winners (as evident in the 2017 bull run).

"The converse is also possible, as prices drop and fear grips the market (2018–2019), a flight to crypto safety drove Bitcoin back to the forefront."

As for "how Coinbase customers trade these assets," Mart says although "the same large-scale trend is evident," he can see that "retail volume on Coinbase shows an increased proclivity to purchase and trade alternative assets."

Perhaps, one of the most interesting parts of Coinbase's blog post is the part where Mart gives several reasons why Bitcoin has remained so dominant among cryptoassets:

  • "Ethos and mission"
  • "Mindshare"
  • "Security"
  • "Decentralization"
  • "Infrastructure and liquidity
  • "Technical simplicity"
  • "Creation myth and intangibles"

Featured Image by "SnapLaunch" via Chart Courtesy of Coinbase.