Multinational investment services corporation Fidelity Investments is predicting that 2019 will be a big year for the blockchain industry and crypto assets. Many investors are likely breathing a sigh of relief right now, eager to cash in on the glory they experienced back in late 2017.
Days of Crypto’s Former Power
We all remember Q4 2017, when cryptocurrencies were at the height of their popularity. Bitcoin, for example, made a real impression on investors both young and old, when the currency peaked in December at a near $20,000 price. Things seemed set in stone — the cryptocurrency market was strong, solid, and here to stay.
Unfortunately, this didn’t last long.
Within a month, Bitcoin had lost several thousands of dollars from its price. Other currencies, such as Ethereum, Bitcoin Cash and Litecoin – all of which had also experienced their highest prices in December – were suddenly down in the dumps with Bitcoin. The future seemed dark and bleak for digital currency.
2019 Could Be A Turning Point
But now Fidelity is suggesting that crypto can once again return to its former self, and that 2019 will be the start of something new and exciting in the industry.
To appease all its customers holding crypto and potentially attract new institutional clients, Fidelity has launched a startup entitled Fidelity Digital Asset Services (FDAS). The firm will be headed by Tom Jessop, former head of global tech development at Goldman Sachs, who says that along with cryptocurrency custody, Fidelity will also offer institutional trade execution and aggregate exchange data.
To further get the news out about the new, crypto-based subsidiary, Jessop met with blockchain journalist Laura Shin for an episode of her podcast, Unconfirmed and Unchained.
Fidelity Digital Asset Services president Tom Jessop explains why its crypto offering for institutional clients is focused on custody and trade execution, why it's not launching an exchange + whether they plan to create an offering for retail customers. https://t.co/f6hlrIAqcC
— Laura Shin (@laurashin) October 26, 2018
During their interview, Jessop explained the reasoning behind forming FDAS:
We’ve come across several clients who have reasonably large positions in crypto that are held in self-custody, and a number of customers who cannot execute orders to purchase digital assets until they have a custodian. So, I think there is a lot of pent-up demand right now.
Fidelity began venturing into crypto territory roughly 4 years ago when, according to Jessop, executives “were really focused on this thing called frictionless capital markets,” designed to make financial systems more efficient, cost effective, and accessible to the masses.
Blockchain was a popular topic among the group, who began experimenting with the technology through Fidelity Labs.
The division then became interested in Bitcoin mining and opened a whole new platform that would allow customers to purchase in-house cafeteria items with BTC. Executives at Fidelity saw just how popular the program was and learned loads more about the cryptocurrency and its respective technology.
After a long period of experimentation, FDAS made its official debut.
Change Is Coming
On how Fidelity would serve the crypto market, Jessop stated:
Our vision is [to provide] institutional brokerage capabilities for family offices, hedge funds and other institutions that are or want to invest in digital assets.
Though current prices would indicate otherwise, Jessop is confident the cryptocurrency arena is set to experience new levels of popularity and growth, thanks to heightened interest among Wall Street players.
He also stated that blockchain innovation is at an all-time high, and more entrepreneurs and developers are seeing the crypto arena as the perfect place to build their projects:
I think we are starting to see an acceleration… I don’t know what phase (innovator, early-adopter, early majority, etc.) we are in, but I think that with some of these recent announcements – our announcement, Bakkt’s launch, Harvard, Stanford and MIT allocated into this asset class – we are now seen as this interesting and transformative asset class… So, we can expect more news heading into 2019 that raises the bar and helps growth in the [crypto and blockchain] market.