Fidelity just made it easier for hedge funds and other pros to invest in cryptocurrencies

• Fidelity Investments, which administers more than $7.2 trillion in client assets, announced a new and separate company called Fidelity Digital Asset Services on Monday.

• The firm will handle custody for cryptocurrencies such as bitcoin and will execute trades on multiple exchanges for investors such as hedge funds and family offices.

• Other crypto companies have debuted similar products, but Fidelity is the first Wall Street incumbent to officially provide cryptocurrency solutions such as custody.

• “Our goal is to make digitally native assets, such as bitcoin, more accessible to investors,” Fidelity Investments Chairman and CEO Abigail Johnson says.

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Financial services giant Fidelity is taking a huge step into cryptocurrency.

The 72-year-old firm announced the launch of a separate company, Fidelity Digital Asset Services, on Monday that will handle cryptocurrency custody and trade execution for institutional investors.

"Our goal is to make digitally native assets, such as bitcoin, more accessible to investors," Fidelity Investments Chairman and CEO Abigail Johnson said in a press release. "We expect to continue investing and experimenting, over the long-term, with ways to make this emerging asset class easier for our clients to understand and use."

Tom Jessop, head of Fidelity Digital Assets, said the idea of commercializing a standalone crypto company began in the middle of last year.

For now, its services are available to institutions such as hedge funds, endowments and family offices but not to the retail investor.

 

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Fidelity is nothing if not big. It administers $7.2 trillion in customer assets, has 27 million customers, and spends $2.5 billion per year on technology, partially through incubators that house its artificial intelligence and blockchain projects. The new digital asset company was born out of Fidelity Center for Applied Technology, or FCAT as employees call it.

The new company will handle custody, or how to safely store digital assets. Crypto companies Coinbase, Gemini (run by the Winklevoss twins), BitGo, Ledger and ItBit are among those already working on similar solutions. Japanese bank Nomura also announced plans in May to offer crypto custody, and Goldman Sachs and Northern Trust are reportedly exploring custodial services. But until now, there's been a noticeable lack of a big U.S.-based incumbent like Fidelity officially entering the space.

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