Fidelity will be offering Cryptocurrency custody services to Bitcoin holders according to off-the-record leaks. The company specializes in managing mutual funds and the service is expected to allow the company to serve Cryptocurrency holders better. The sources reveal that the launch date is expected in two months and is set to attract institutional and retail investors.
This comes following an announcement by the Boston-based firm in October 2018 to offer financial products to large investors like hedge funds. It is evident that the Crypto custody product is the first of the services.
Security Concerns In Crypto Markets Are Growing
Fidelity aims to tackle the thorny issue of security that the Cryptocurrency community has been grappling with for a long time. Hackers have been able in many instances to gain access to wallets and make away with Digital Tokens worth millions of dollars. Hence, the Bitcoin custody service will ease the fears and give confidence to Crypto traders.
The Product Will Be Rolled Out In Phases
For starters, Fidelity will start to offer custody services for Bitcoin. This is in recognition of the fact that BTC has a Crypto market dominance of over 52% and the service will, therefore, have a bigger impact in the Cryptocurrency community.
Secondly, Ethereum custody service will be unveiled when Bitcoin custody product stabilizes. Despite the fact that no timeline has been given for the second product launching, it is expected to take the market by a storm and encourage mass ETH adoption.
The initial solution of targeting BTC and later ETH holders has also been arrived at through prioritization of prospective clients based on factors such as jurisdiction need, etc.
Custody Services Started In Financial Markets
Custody services are a common practice in the traditional financial markets such as stocks. The product involves a third-party that hold securities on behalf of the clients to minimize or practically eliminate the risk of any form of loss. Many high net worth investors prefer to select only large companies such as Fidelity, Northern Trust Corp, JPMorgan Chase & Co., and Bank of New York Mellon Corp.
In the same way, Fidelity is offering a Cryptocurrency custody services that is modeled like financial product services. The product aims to serve the Crypto market that is usually plagued by the ever-looming security concern because of hackers’ prowess.
Introducing The Fidelity Digital Assets
The CEO of Fidelity, Abigail Johnson, has been enthusiastic about Bitcoin for long. Under her leadership, Fidelity began mining Bitcoin in 2015. The company, therefore, has the experience that guarantees professional handling of BTC Tokens. The CEO is confident that Wall Street investors who have a growing appetite for Bitcoin will buy the BTC Custody service.
Fidelity will, however, be facing stiff competition from other providers of Crypto custody services such as itBit, DACC, BANKEX, Coinbase, BitGo, etc. However, to carve out a market niche for itself, the company is developing a framework of staving of hackers, adhering to compliance rules, and managing Cryptographic keys in order to guarantee quality services.