Fidelity Investments’ cryptocurrency branch launched its first foray into Europe. With this, the company, which is among the world’s largest investment managers, is opening a new front to make digital assets the main investment. The target is family offices – which manage equity from wealthy families – wealth managers and some cryptocurrency companies.
According to Reuters news agency, Fidelity Digital Assets will act as a custodian of bitcoin maintained by Nickel Digital Asset Management, the London-based cryptocurrency investment firm.
The lack of custody services offered by large financial companies is one of the reasons why large investors around the world do not invest in digital assets. Institutional investors, as a rule, do not perform assets custody.
Fidelity in Europe as a Carrier of appreciation
Therefore, Fidelity’s foray into Europe represents an important step towards cryptocurrencies insight. If the custodian can attract a significant number of stakeholders, expectations of institutional investors approaching digital assets can improve and be a price vector for these assets.
Although the scenario is changing little by little, large pension funds and asset managers remain skeptical of digital currencies. Despite the big potential gains, there is still insecurity due to lack of regulation and fears of hacker attacks.
Bitcoin, for example, doubled in value last year, driven by expectations of increasing adoption by institutional investors. However, short-term volatility still scares a lot of these investors.
In addition, Facebook’s attempt to attract digital assets to the mainstream, presenting its Libra currency, is still being cast in doubt. Initially, the asset found strong regulatory resistance in major world powers such as the U.S., France and Germany.
Regulatory barriers in Europe decrease
However, Fidelity Digital Assets’ Head in Europe, Chris Tyrer, believes that obstacles preventing participation in cryptocurrency markets by institutional investors – including regulation, as well as the quality of providers of services and high volatility – are gradually decreasing.
“We are seeing an increase in the interest of institutional investors”, he told Reuters. He also added that harmonized regulation in the European Union would be useful for service providers.
Launched in 2018, Fidelity Digital Assets offers cryptocurrencies trading and custody services to companies and financial corporations