It appears that the big players of institutional financial investors in the Americas are exploring the final frontiers of the current digitized cryptocurrency financial products. On Sunday, Fidelity Investments through its hat into the hot ring of alternative currencies systems which in the latest week have seen the likes of MasterCard as well as Visa take initial steps into these decentralized ledger technology platforms.
The latter two payment card players have their own short-term exposure plans that are backed by long-term goals of cryptocurrency adoption upon market maturing into mass adoption of these currencies. Fidelity Investments apparently chose to enter the competition for crypto-adoption based on the increase in the demand for such currencies by its rich and well-heeled clientele.
Bitcoin’s fluctuations are the backdrop
One of the biggest challenges for governments across the world to venture into mainstream cryptocurrency adoption has been the availability of a multiplicity of coins and the disparate difference in values between what is considered as the Major Coins – namely, Bitcoin, Litecoin, Ethereum, and the Minor Coins or altcoins.
The price fluctuations that are legendary with the Bitcoin has dampened the efforts to mass adoption and has instead encouraged low-profile investment plans.
However, with prices of this bell-weather coin having achieved reasonable stability between the price range of $5,000 to $7,000 to a bitcoin in the past few months, there are new investment channels being explored by investor community and the financial institutions.
Gemini-exchange-backed ETFs and other applicants have since been rejected by the United States regulatory body; thus signally the country is not ready with structures required for the handling and management of non-fiat currencies.
On the other hand, the stepping of financial institutions such as BlackRock in association with Coinbase Exchange could well mark the transition to trust-based trading practices. The price fluctuation and the continued differences in trading values have always pressurized the small investors and mainstream investors from being part of the bigger investment setup.
For Fidelity Investments there is scope for a wide range of products, based on the blockchain technology platform. One such example is the bitcoin futures contracts. However, such products require more technical research and analysis and are perhaps in different stages of development by respective institutional investors before they are available for public consumption.
Experts even indicate that Pension funds and Asset managers could also consider the movement of their funds into virtual assets such as bitcoin.
Despite the uptrend in institutional investors making a beeline towards these secured and authentic investments, the onus is on the cryptocurrency industry to handle the current crop of issues. These could be the question of “trust,” crypto hi-jacking other key concerns which investors are currently discussing. The main concern will be about ensuring the safety of the products introduced by these big-investment players. Therefore Custody solutions will be the necessary products in the first step towards capital fund flow from Wall Street. Currently, Fidelity Investments is already offering custody services, and it could be an incremental step forward to offer these non-fiat currency products.