Fidelity will soon allow individual investors to trade crypto on its platform.
Key Details
- Fidelity Investments is considering a plan to allow individual investors to trade bitcoin on its brokerage platform.
- The leading investment firm launched a bitcoin-trading business for institutional investors in 2018, and earlier this year started allowing corporate clients to add the digital asset to the 401(k) retirement plans it manages for them.
- Cryptocurrency prices have been a rollercoaster this year. Bitcoin has slumped about 50% this year, in the wake of the big crypto sell off.
- “While we have nothing new to announce, expanding our offerings to enable broader access to digital assets remains an area of focus,” Fidelity said in a statement.
Why it’s important
Fidelity’s entrance into the business of crypto brokerages would be no small thing. Extending crypto trading services to more than 34 million customers has the potential to drastically increase the pool of individual American investors trading bitcoin through regulated brokerages, says Barron’s.
When the company decided to allow bitcoin in its 401(k) accounts, investors believed it would soon allow brokerage customers to have crypto in their accounts.
Some of its competitors, including Robinhood Markets Inc., have used access to digital assets as a key selling point for a new generation of investors who had started trading everything from stocks and options to bitcoin in 2020, according to The Wall Street Journal.
Fidelity hasn’t revealed details of its plans with clients as of now.
Scrutiny
Fidelity allowing investors access to crypto has garnered some security from Washington.
The U.S. Department of Labor has said it was concerned about companies’ decisions to allow its employees to invest in cryptocurrencies through their Fidelity retirement plans. Several U.S. senators have also raised questions about the plan, citing the risks inherent investing savings in such risky assets, says The Wall Street Journal.
