Wall Street is realizing the power of crypto. Fidelity Investments CEO Abigail Johnson announced on Friday that the fourth-largest asset management firm in the world with $2.5 trillion in assets under management plans to roll out cryptocurrency and blockchain products and services by end of 2018.
"We’ve got a few things underway, a few things that are partially done … We hope to have some things to announce by the end of the year," said Johnson at Boston Fintech Week 2018. Abigail Johnson is chairman and CEO of FMR, LLC, the parent company of Fidelity Investments. The firm has 27 million customers who have $6.9 trillion in assets with the firm. Xconomy covered the weeklong conference that ended Friday and first published the report.
Early Exploring Of Bitcoin
The Boston-based company is one of the first financial institutions to explore cryptocurrencies. In 2015, it allowed donors to contribute $69 million worth of Bitcoin (CRYPTO: BTC) and other crypto to its charity division. Further back in 2013, Fidelity experimented with Bitcoin mining to better understand the technology.
"It seemed like kind of a dubious concept at the time, but I think the price [of Bitcoin] was around $160 to $180 at the time we launched the mining operation. We never thought we’d make money, but we figured it would be a good idea because we’d get in at the ground level and we’d learn something."
At the conference, Johnson said her team has built a long list of use cases for Bitcoin, Ethereum (CRYPTO: ETH) and other cryptocurrencies as well as blockchain technology — though many ideas have since been scrapped. However, she said that the products and services Fidelity plans to roll out later this year won't necessarily be the ones she had initially expected. So a surprise could be on the way.
"We were trying to listen to the marketplace and anticipate what would make sense …. Over and over again when we study our customers, we find that most people want to have a conversation on occasion with a real person about their financial situation. Or at a minimum, know that they could. That’s important to almost everybody."
New Crypto Investment Platform?
It's speculation at this point, but perhaps Fidelity will roll out platforms and apps that make it extremely easy for older and mainstream investors to buy and sell Bitcoin and major coins. Because if they can't understand it, they won't adopt it. Similar to how BMW is streamlining the car buying experience
through blockchain, digital wallet and artificial intelligence.
One thing is certain: $2.5 trillion is a lot of money and investment firms wouldn't get into cryptocurrencies and blockchain if they didn't think these vehicles could offer superior returns. Moreover, holding investments in U.S. dollar denomination means an investor can lose 2% (or more) per year through inflation and/or USD devaluation.
Ripple Jumps 24%
Despite the bearish market, Ripple (CRYPTO: XRP) on Tuesday jumped 24% to $0.33 on reports that the San Francisco, Calif.-based company is engaged in ongoing talks with the SEC about use cases for XRP, including educating U.S. regulators on why its token is not a security.
XRP is considered a payments-related cryptocurrency aimed at the financial industry. Ripple was the biggest gainer out of the top 50 cryptos in late Tuesday trading.
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