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Can Fidelity Investments Post Record Profits with Bitcoin, Crypto?

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Ricardo Martinez | Mar 04, 2020 | 14:34

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Can Fidelity Investments Post Record Profits with Bitcoin, Crypto?

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Ricardo Martinez | Mar 04, 2020 | 14:34


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Fidelity investments just announced that they made record profits in 2019. Can they do the same with their bitcoin and crypto investment arm?


Fidelity Continues to Thrive and Adapt to an Ever-Changing Market

Fidelity Investments just posted record profits for 2019. They had a 9.5% rise in operating income which brought the total to $6.9 billion. Fidelity’s revenue rose 2% to reach $20.9 billion, and they were also able to increase their Assets Under Management (AUM) to $3.2 trillion, up almost a trillion from the previous year.

While many brokerages have been negatively affected by investors’ demand for low fees and low-cost investment opportunities, Fidelity has diversified their business model to thrive in this kind of environment.

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Fidelity grew its client base in retail, retirement, and institutional investments, including employee stock plans, 401(K), and health-care savings accounts. Fidelity has also been a leader in traditional finance when it comes to conventional investments.

Fidelity has a crypto investment arm, which offers custody of crypto-assets, digital asset trading, they have Bitcoin mining investments and a crypto exchange. Can Fidelity lead the way to post record profits in crypto investments utilizing a similar strategy that they employ in traditional markets?

Fidelity Embraces Crypto-Asset Investment Unlike Other Brokerages

Traditional finance has typically stayed away from cryptocurrency, seeing it as a fringe investment or too risky. This has caused many financial managers to completely miss out on Bitcoin, Ethereum and other extremely profitable investments in the space.

Bitcoin has been the best-performing asset of the last decade, yet many investors see it as unsavory, due to its use on the deep web markets, use for ransomware and other censorship-resistant use cases. This is the root of the rallying cry for blockchain, not Bitcoin.

Fidelity has not shied away from the opportunities presented by the nascent crypto markets. They have been one of the first investment firms to invest in Bitcoin mining, and they have invested in a big way.

Fidelity is also one of the few businesses that has managed to jump through the excessive amount of hoops required by NY state’s Bitlicense requirements. NY is a desert for crypto investors, due to its strict regulatory burdens imposed on crypto businesses.

They also are one of the first fully-regulated crypto-asset custody solutions, which offers custodial services not only in US markets but also in the EU and UK. Fidelity has also pioneered crypto-trading offering institutional and retail exposure to crypto-assets.

This leadership role they have taken gives reason to believe they can replicate their success in traditional markets, with their crypto investment arm. Fidelity could be the one to watch for 2020.

Do you think Fidelity can strike gold with its crypto-asset investments? Let us know in the comments!


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