Fidelity Investments’ new crypto company is up and running

It is targeting hedge funds, family offices, pensions, endowments and other institutional investors

Fidelity Investments’ crypto division, Fidelity Digital Assets, has gone live with a select group of clients.

“Our initial clients are an important part of our final testing and process refinement periods, which will eventually enable us to provide these services to a broader set of eligible institutions,” it says in a Medium post.

It’s very much a work in progress. “It’s been a challenging and rewarding time here, from critical decisions on product direction, to the intensive work of our development teams,” the post continues. “Our operations, risk, and compliance teams are actively working with auditors to refine our policies and procedures, adapt existing operational processes, and to set new benchmarks for this aspect of cryptographic and blockchain-based finance.”

“We realise Bitcoin is not the first form of digital cash, but we recognise the transformative potential it has created. Over the next several months, we will thoughtfully engage with and stage prospective clients based on their needs, jurisdiction, and other factors,” it concludes.

Collapse in crypto prices

This hasn’t impacted the new venture, Tom Jessop, Head of Fidelity Digital Assets, told CNBC this week. “If you started a crypto fund at the height of the market you’re probably hurting right now,” he said.

Jessop also insisted there was long-term interest from institutional investors to add some form of cryptocurrency to their portfolios. He cited research carried out by his firm, involving roughly 450 institutions. About 22% of the respondents already owned cryptocurrency. And they expected to double their allocation over five years.

“If anything, they are as encouraged now as they were when prices were higher,” Jessop stated.

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