Crypto space has visited various things in the last few months. The crisis in 2018, the entry of institutional money into this space, Bitcoin Lightning Network, Bakkt etc were some of the news that shaken this industry. While some investors take back their investment from the crypto space, new firms entered. Some of them are largely opposed whereas there are some of them are completely bullish in the field.
If we talk about the most bullish bitcoin news in 2019, one news that comes first in our mind is the news of the launch of bitcoin custody service by Fidelity in March 2019. In this article, we will firstly brief about this news and then we will argue how this news is the most bullish news of 2019.
Fidelity, also known as Fidelity Investments Incorporation is a Boston based multinational financial service organization. In October 2018, Fidelity announced that it would be launching several crypto products. Further, it was added that these products will be only for large investors such that of Hedge Funds. This news was normal but after some days some bullish addition to this news came into focus.
It was revealed that the first product that will be launched in March 2019 would be a bitcoin storage product. According to the news, the firm is aiming to launch its Bitcoin custody service in March 2019. This product as per the firm is a move to reduce the fear of cryptocurrencies among large investors. Further, it was revealed that the next product after this launch will be ethereum custody service.
According to the officials, the firm was aiming to serve some selected clients only at the initial phase. This information was completely like the catalyst in this space.
First of all, let us have a deep understanding of the news. As per Fidelity, the product to be launched in 2019 will dedicate to bitcoin custody service.
Custody service if we understand in normal finance, is a common practice which involves third party services which hold securities to minimize the risk of being stolen or lost. It is widely used in stocks as well as bond markets. However, some govt. doesn’t support this service as a possible security breach.
Now, Fidelity aims to implement the same into the cryptocurrency industry. It wants to use its name and faith of people of its core performance. However, it seems completely feasible. There was a need of such service in this sector. Without any doubt, the idea is appreciable as thousand of theft news of cryptocurrencies are seen and it is aiming to handle and reduce such kind of risks from crypto space.
1. First of all, we need to understand the need for such service in the crypto market. The transactions are not physical here. Also, the currencies have completely different properties here. They are digital, not cash or normal currency. These things make it almost feasible to recover if someone steals the vulnerable value of your cryptocurrencies. Thus, the market was in need to have a faithful service provider in this concern for a long time.
2. Two of the ever faced challenges to the crypto space are scalability and security. These two factors are dependent on each other. If we increase the scalability, there are changes in the decrease in security. Similarly, if we try to increase the in-built security in this network, the scalability goes down. So, the perfect solution was to have a third party who can manage this security. Thus it will serve as a solution for both, directly for security as well as indirectly for scalability.
3. After the crisis of last year, crypto space needed some excellent features and support to it to regain its desired position. While the introduction of Bakkt, the launching of Lightening Network etc ignited the market, this feature is surely going to help cryptocurrencies rising their values. Security and no fear of being stolen the cryptocurrencies will attract more and more investors thus eventually leading to a fruitful step for cryptocurrencies and their future in the market in this year
4. Apart from that, we all know that cryptocurrencies are undergoing a transition to a different consensus algorithm. They are moving from proof-of-work (POW) to proof-of-stake (POS). These make the stake more vulnerable. If someone steals your coins, you will lose all your coin as well as position in the crypto space in this consensus algorithm (POW). This certainly makes the essential need of such service in the space to secure the stake in this market.
We discussed how the news of the launch of bitcoin custody service by Fidelity in March 2019 is complete bullish. The crypto space was in search for some trusted and big organization who can provide security in this market and then come to Fidelity. This service completely seems feasible with the current scenario and market conditions in the crypto space.