Jamie McNeill
Global asset managers Fidelity Investments may soon offer Bitcoin trading to their 34.4 million brokerage account holders.
According to a report in the Wall Street Journal the firm, which has more than $4 trillion AUM, could consider the move in the near future.
Fidelity has been one of the leaders in offering digital assets to institutional investors and high net worth individuals, having first offered Bitcoin as a trading option in 2018.
Notably, Fidelity recently launched their Bitcoin index fund, which has since had hundreds of millions of dollars in inflows, while they have mined Bitcoin since 2015 and have also offered BTC on their 401(k) retirement plans.
Bitcoin trading for the masses – Fidelity currently has 34m brokerage accounts
Platforms such as Coinbase and Binance already offer trading services for their clients and have become extremely trusted.
Now that the industry is so heavily regulated, one can have a high degree of confidence in these firms. Both are required to obtain a series of licenses for offering their services (Binance has obtained more licenses pertaining to crypto than any other company) and are fully compliant.
There are also high degrees of certainty that one can have with regard to the security of one’s funds. All large centralised exchanges are forced to take a series of steps to ensure that funds deposited to their platform are never compromised.
Some will use third party custodians such as BitGo, and nearly all will use a mixture of cold wallets and hot wallets to ensure that their users’ funds are secure. Moreover, there is a series of KYC, AML, and 2FA procedures that are often required to ensure that one always remains compliant.
Finally, decentralised exchanges like Binance are also home to the highest degrees of liquidity, since that’s where the majority of traders are.
Fidelity’s introduction of offering Bitcoin to 34 million brokerage accounts is significant because the aforementioned exchanges are designed for people who are already crypto native.
Fidelity offers a range of services to their clients but has been far more focused on traditional assets than Bitcoin.
Rising exposure for Bitcoin
Bitcoin is the most trusted and secure network in the world, and its prominence has ushered in an explosion of innovation over the past few years.
Not only that, but the ability for anyone around the world to be able to save in a demonstrably scarce asset means that for those who adopt Bitcoin, the economy will have evolved into a paradigm that is less exploitative and has the same rules for everyone.
We will see a seismic shift to #Bitcoin and sound money. The next 5 years will be incredible.
Guatemala 2023
Argentina 2023
Bitcoin Halving 2024
El Salvador 2024
Panama 2024
Mexico 2024
Canada 2025 (could be 2023/2024)
Peru 2026
Nicaragua 2026Fix the money. Fix the world.
— Samson Mow (@Excellion) September 12, 2022
Samson Mow, who has become something of a consultant for nation states considering adopting Bitcoin, Tweeted out that he believes the next few years will be extremely significant for Bitcoin.
The cryptocurrency is becoming more politically significant every day and he predicts a “seismic shift” in sentiment around BTC globally, especially in South and Central America where a number of elections are set to be held in the coming years.
The growing political importance of crypto
By 2024, it is predicted that one of the largest single-issue voting blocks in the US will be Bitcoiners, although countries in Central and South America are more greatly incentivized to adopt Bitcoin given the extent to which their own currencies are declining.
Over the past few months, the US dollar has been growing stronger and stronger, whilst currencies such as the Argentine Peso have been growing weaker extremely quickly.
At the far end of the spectrum, Middle Eastern countries such as Lebanon are also becoming greatly incentivized not to continue with fiat and to adopt a monetary policy that can’t be so easily debased – the collapse of the Lebanese Pound has meant that millions have been left completely impoverished.
Fidelity, as one of the world’s largest and most influential asset managers, is crucial for the further development of the cryptocurrency space, and in legitimizing the asset amongst those who remain more traditionally minded when it comes to finance.
There is no doubt that legislators and regulators will be pleased encouraged by the news, and that Fidelity’s product offering will be a brilliant catalyst for more people to join the world of Bitcoin.
Unlike Binance and other centralised exchanges, it seems unlikely that Fidelity will be focusing so closely on leverage trading, and they are thus unlikely to promote practices like that, which are hugely detrimental to society since they can completely destroy people’s financial portfolios.
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This article was written for Business 2 Community by Jamie McNeill.
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