As of this week, prices of Bitcoin have more than doubled from last year’s trough. While observers are still debating the real reasons behind the rebound, some mainstream financial services firms may see this as a sign to restart projects on digital asset trading.
Earlier this month, Bloomberg reported that Fidelity Investments, the U.S. fundhouse with about $2.5 trillion of assets under management, is planning to roll out services for trading bitcoin for its institutional investor clients “soon.” While there weren’t many details given and the Fidelity spokeswoman cited in the article didn’t directly confirm the report, there’s little doubt of its authenticity given merely days ago the firm published a survey reflecting growing interest among investors in cryptocurrencies.
The survey interviewed 441 institutional investment groups, including hedge funds, family offices, foundations, and endowments and found 22 percent of them already hold cryptocurrencies. What’s more important to firms like Fidelity though is that 40 percent are open to adding the asset class to their portfolio. So it appears that Fidelity is making a move in response to genuine demand from investors.
Big Wall Street institutions like Fidelity getting into crypto is an important sign of the market maturing, and that confidence amongst investors in crypto as an asset class is growing. This can only be welcome news, and of course something the OAX team have been working towards since our launch. But while major financial institutions getting involved is a welcome sign that the industry is being taken seriously, it is also making us reflect on what the future of this market should look like.
Our technology development work is all about building systems tailored to the essential qualities of digital assets, and that means taking a new approach. We believe that only through a trustless system can the potential of digital assets really be achieved — with all the right governance controls, of course. This will allow all market participants to benefit from what digital assets can bring. So while we welcome traditional financial services organisations to the community, let’s not forget that it’s only by innovating that we’ll really reap the benefits for everyone.
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