Since the emergence of blockchain technology and digital currencies, a lot of firms have shifted their focus to these industries. A lot of companies and organizations have also emerged to use blockchain to solve one problem or the other. The finance industry, asset management, insurance, gaming industry, etc. have been adopting the blockchain technology.
Recently, Fidelity – the fourth largest asset management firm in the world – revealed its plans to expand its custodian services. The firm has been providing custodial services for Bitcoin (BTC) for quite some time. The firm now wants to go beyond Bitcoin (BTC) and look into other digital currencies in the crypto market.
Bitcoin (BTC) Price Today – BTC / USD
Fidelity Digital Assets Is Evaluating the Top 5 Digital Currencies
The head of Fidelity Digital Assets – Tom Jessop – said that the firm is weighing the demand for the top five digital currencies in the crypto market. After the evaluation, the firm might integrate support for the remaining assets. Fidelity Digital Assets is the digital currency custodial service of Fidelity.
During a Block FS conference in New York, Jessop said “I think there is demand for the next four or five in rank of market cap order. So we will be looking at that.”
The comment of the Fidelity executive comes at a time when top financial institutions such as $27 billion State Street and $70 billion Goldman Sachs are waiting for either sufficient demand or regulatory clarity for customers to support digital currencies.
More Institutional Investors are Delving into the Blockchain Space
The majority of the infrastructures that are being developed in the US market by top financial institutions are designed for institutional investors that want to invest a minimum of $5 million in the digital currency market. This is the minimum investment brink on Coinbase Custody. At the moment, the demand for digital currencies by institutional investors is not certain.
The only way the market can be calculated is via the evaluation of the custodians’ performance that are already in existence. That includes BitGo, Coinbase, and Fidelity. Over the past 11 months, the value of the entire digital currency market has reduced by more than 85 percent.
As a result, the demand for digital currencies has greatly reduced by a massive margin since January this year. However, the exploring of more digital currencies by Fidelity shows that the firm is seeing sufficient demand from institutional investors. The demand is sufficient enough for the firm to justify placing additional resources to strengthen its product.
Regulatory Barriers Are Preventing Some Financial Institutions from Entering the Crypto Space
There are lots of financial institutions that want to delve into the crypto space. However, they have been on the fence due to uncertainty and regulatory issues. The regulatory barrier is also preventing State Street, Goldman Sachs, Morgan Stanley, and other financial institutions from storing digital currencies on behalf of their clients.
While it might take quite some time for top financial institutions to get the required approval, the firms are seeing sufficient demand in digital currency to justify their entrance into the digital currency space.