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Fidelity Investments has quietly opened access to bitcoin and ether trading to all of its retail traders, filling a void created by the closures in recent days of cryptocurrency-friendly banks that bridged the divide between digital and traditional finance.
The Fidelity Crypto platform, previously available only to institutions and some waitlisted customers, was made available on Wednesday. Individual investors can now buy and sell bitcoin and ether and use custodial and trading services provided by Fidelity Digital Assets.
Clients are not yet able to transfer cryptocurrency to or from their Fidelity accounts. The company said it would be exploring cryptocurrency transfers in November, shortly after announcing the waitlist, but hasn’t provided a clear timeline.
The separation of investors from the passwords known as private keys that allow direct owners to take custody of their cryptocurrencies combined with the inability to transfer holdings means that Fidelity retains custody of the assets. A string of bankruptcies among crypto exchanges and investment programs last year illustrated the drawbacks of entrusting digital assets to intermediaries, though Fidelity’s size and reputation likely mitigates the risk.
The company has not responded to a Forbes request for more information.
Trading is open only to U.S. citizens over the age of 18 who reside in one of the 36 states where Fidelity Digital Assets offers services.
Following the footsteps of stock-trading app Robinhood and crypto exchange Binance.US, the asset manager has touted the offering as commission-free, but there’s a catch: a 1% fee will be added to each transaction. The company calls the fee a spread and defines it as “the difference between your execution price and the price at which Fidelity Digital Assets fills your order.”
The move comes at a time when the U.S. cryptocurrency market is facing regulatory pressure, sparked by multiple high-profile collapses last year, and closures of crypto-friendly banks including the Silicon Valley Bank, Silvergate and Signature.
Still, the Fidelity service “provides both the credibility that crypto has needed and the opportunity for investors, most of whom rely on their financial advisors for investment strategies,” says Ric Edelman, a financial advisor and founder of Digital Assets Council of Financial Professionals.
In addition to cryptocurrency trading, Fidelity also provides, Fidelity Ethereum Index Fund, which tracks the performance of the coin in U.S dollars. In December, the asset manager filed three trademark applications for providing NFT and metaverse investment services.
