Get ready - institutional investment in crypto is just around the corner

We’re all waiting for institutional investors to enter the cryptocurrency market lately. That is apparently the catalyst that could ignite the next rocket launch to the moon for bitcoin, bringing volume to the market. With such increased volume the price could potentially soar once more, taking altcoins along with it for the ride.

Well the good news is that behind the scenes, unknown to many of us, big institutional investment companies are already boarding the bitcoin boat and gearing up to deal in crypto, fulfilling our wish for greater mainstream adoption. For example the American investment firm Fidelity, one of the biggest in their field, has already launched a new branch called Fidelity Digital Asset Services. This was back in October 2018 already. Fidelity currently administers over $7.2 trillion for their clients generally, so when it launches its bitcoin custody offering in March, a good amount of them will hopefully buy in and lift the boat of bitcoin with their increased liquidity.

The March date is, of course just days away, and although retail investors like us won’t be allowed to participate, the bigger institutions like hedge funds and other market intermediaries will all be able to climb on board, bringing some of those trillions of dollars with them into the crypto space. That kind of liquidity is just what we have been waiting for, and it’s looking fairly certain, considering that they announced it in major news outlets like Bloomberg and Medium recently.

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At the moment Fidelity is in their “final testing and process refinement period”, which sounds very promising because it means that they are already allowing some of their clients to use the service as a test run before the doors are opened to all the rest. It’s just a matter of adapting their existing services and ensuring regulatory compliance and then their custody services can expand from storing money, securities and commodities like gold and diamonds, to also storing crypto.

That’s what a custody service is, but unlike a bank, they are not allowed to use the stored assets for their own re-investment, taking liberties with their customers’ assets. Other major firms that traditionally offer these services are JP Morgan and Northern Trust. Curiously enough even Coinbase, one of the biggest crypto exchanges in the world, also offers “custody solutions”, as they like to call them. It’s also only for institutional clients though, but has been operating since July 2018. To top that, Coinbase has already been storing over $20 billion worth of cryptocurrency for their client’s over the past six years.

As for Fidelity, it turns out that even their CEO, Abigail Johnson, is actually a crypto enthusiast herself. She introduced bitcoin and ethereum mining at the firm back in 2017. In other words there is actually a real interest in bitcoin even among top mainstream financial institutions.

You just don’t always hear about it.

“I’m a believer. I’m one of the few standing before you today from a large financial services company that has not given up on digital currencies.”

Abigail Johnson, CEO of Fidelity

We usually think of these giant financial institutions as being against cryptocurrency, but they are merely being conservative as a general rule, considering that they deal in billions of dollars for their customers at a time, investing or simply holding them in storage as a protection against theft. If these same big institutional customers can now start buying and investing in crypto, knowing that companies like Fidelity will store them safely, then it’s just a matter of time before we see those billion entering the crypto market, pushing the market cap back up from just over $100 billion where it is now, back all the way up to $1 trillion in the coming months.

That would really be inspiring and offer a promising future for cryptocurrency – a future for which we all wait with eager anticipation.

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