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Fidelity remains optimistic about crypto’s long term prospects


As Bitcoin continues to crab sideways, Fidelity Digital Assets have expressed their optimism about the long-term prospects of the crypto industry. The Digital Assets unit of the investment giant is doubling down on hiring, as they plan to add another 100 new staff over the next six months.

Chris Tyrer, head of Fidelity Digital Assets Europe and head of Fidelity Digital Asset Management, said during a panel at the Blockworks Digital Asset Summit in London this week: “We’ve gone through a fairly aggressive hiring spree over the last 12 months and we probably, in excess, doubled the size of our organization. We’re probably looking at adding another 100 over the next three to six months.” This would make the unit’s headcount come to around 600.”

Fidelity manages around $9.9 trillion and has been immersed in the crypto industry for years. Their recent actions show they are becoming more bullish on the sector, as they have recently launched an Ethereum index fund (that will allow institutional clients access to ETH by the end of this month) and a digital asset exchange alongside Charles Schwab and Citadel Securities.

“This action from Fidelity defies the bearish trend of significant layoffs seen amongst many crypto firms,” noted cryptomarkets analysts Marcus Sotiriou, at GlobalBlock.

Coinbase, BlockFi, and market maker GSR, among others, have mostly had to cut at least 20% of staff in recent months. This suggests that the bigger companies with larger balance sheets, who are able to weather through the storm, will capitalise on the downfall of others.

Fidelity said last week it was adding Ethereum custody and trading services to its original Bitcoin offering. It began marketing an Ethereum index tracking fund in September which is also thought to be doing well in terms of sales, despite the downturn in cryptocurrency prices. It should be noted that currently Fidelity is only serving the needs of institutional clients, although we anticipate a retail offering once the US regulatory framework for crypto becomes clearer.

Charles Schwab itself debuted a ‘crypto thematic’ ETF on the NYSE Arca in August, tracking stocks which have exposure to the crypto industry. This came as the US broker published research of its own client base of investors showing that over 20% of them were already active in the cryptocurrency market to some degree.

Larger firms like Fidelity and competitor BlackRock feel they have to respond in some way to client demand for crypto exposure. While it is obvious that many investors already go straight to source for their coin trading, bigger fund managers are worried that they will lose the ability to control some or all of their clients’ investment activity.

Predicting the SEC’s future posture on digital assets remains an esoteric art: speculation is currently raging around which NFTs the SEC is going to define as securities, and hence subject to regulation. SEC Commissioner Hester Peirce recently told the Financial Times newspaper that some form of clear definition was going to be needed for NFTs.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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