Fidelity Launching Crypto Custody and Trading Services

Fidelity Launching Crypto Custody and Trading Services


Fidelity Investments has announced the launch of a new company dedicated to providing cryptocurrency services including custody and trade execution. The services will be available to institutional investors such as hedge funds, family offices, and market intermediaries.

Also read: 160 Crypto Exchanges Seek to Enter Japanese Market, Regulator Reveals

New Crypto Company Formed

Fidelity Launching Crypto Custody and Trading ServicesLeading financial services corporation Fidelity Investments announced on Monday the launch of a new company called Fidelity Digital Asset Services LLC. The firm explained:

The company will offer enterprise-quality custody and trade execution services for digital assets, commonly referred to as cryptocurrencies, to sophisticated institutional investors such as hedge funds, family offices and market intermediaries.

The services offered will be in three areas: institutional-grade custody, trade execution, and dedicated client service.

Fidelity Launching Crypto Custody and Trading ServicesThe custody service will provide “a secure, compliant, and institutional-grade omnibus storage solution for bitcoin, ether and other digital assets,” Fidelity detailed, adding that its solution consists of vaulted cold storage and an access control system the firm described as “multi-level physical and cyber.”

The trade execution service will leverage the firm’s internal crossing engine and smart order router which “will allow for execution at multiple market venues.” Lastly, its clients “will have access to a dedicated team of client service specialists, from onboarding throughout the entire relationship with the company,” the firm elaborated.

Tom Jessop, head of Fidelity Digital Asset Services, told CNBC that the firm already works with 13,000 institutional clients. He noted:

These institutions require a sophisticated level of service and security, equal to the experience they’re used to when trading stocks or bonds.

With assets under administration of $7.2 trillion, Fidelity says it helps more than 27 million people invest their own life savings and employs more than 40,000 associates.

Fidelity’s Crypto Efforts

Fidelity Launching Crypto Custody and Trading ServicesAbigail P. Johnson.

Fidelity Investments’ chairman and CEO, Abigail P. Johnson, first revealed her firm’s crypto plans in May last year. She said at the time, “I love this stuff … and what the future holds … I’d like to think that huge new markets and products will be built on these open platforms.”

The firm began researching cryptocurrency in its blockchain incubator in 2013. It has experimented with crypto mining and has integrated with Coinbase to allow customers to see their crypto balances on the Fidelity website. In 2017, Fidelity Charitable, a public charity, received $69 million in crypto donations.

In Monday’s announcement, Johnson commented:

Our goal is to make digitally-native assets, such as bitcoin, more accessible to investors … We expect to continue investing and experimenting, over the long-term, with ways to make this emerging asset class easier for our clients to understand and use.

What do you think of Fidelity launching crypto custody and trading services? Let us know in the comments section below.

Images courtesy of Shutterstock, Forbes, and Fidelity Investments.

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Ethereum’s Constantinople Hard Fork Faces ‘Consensus Issue’ in Testing

An alleged “consensus issue” in the testing of a planned hard fork of Ethereum, called Constantinople, has caused a testnet to be “not usable,” according to a tweet from Ethereum blockchain infrastructure firm Infura October 13.

Infura’s tweet also advises developers to use other testing networks while the Ethereum developer community is “investigating” the issue.

As reported by multiple Ethereum developers the hard fork became active on the Ropsten testnet Oct. 13 at block 4,230,000.

However, the testing reportedly caused a “consensus issue on ropsten,” which led Ethereum developer Afri Schoedon to state in a thread of tweets following the test that there would be “no constantinople in 2018,” adding “we have to investigate.”

As a clarification following the strong statement, Schoedon noted Oct. 14 that at the most recent Ethereum core developers call, developers had agreed they would “not be able to activate Constantinople this year if there are any major issues on Ropsten.” He also added that the next scheduled call on the topic would be Friday, Oct. 19, telling the community to “stay tuned” until then.

The Constantinople hard fork is a system-wide Ethereum update designed to increase the network’s efficiency.

Earlier this year, Ethereum developer Piper Merriam opened an Ethereum Improvement Proposal (EIP) suggesting the idea of a possible Ethereum hard fork to invalidate ASIC miners, which are regarded as highly centralizing.

At press time, Ethereum is trading at $197, down about 1.5 percent over the past 24 hours.

Bitcoin Mining: Three Reasons Why Energy Consumption Rhetoric Is Pure Nonsense

When they aren’t bashing Bitcoin as a bubble, nocoiners can usually be found trying desperately to prove how the activities of miners will bring about the end of the world. Here are three reasons why the energy consumption rhetoric is utter garbage.

The Global Energy Misconception

The pseudo-environmentalist brigade will have you believe that Bitcoin (BTC) 00 mining would be the death of the planet. Much of their arguments revolve around the energy consumption of data centers used for carrying out the complex mathematical computations needed to validate transactions on the blockchain.

The problem with these arguments is that they imagine the world as having a single energy grid as highlighted in a recent series of tweets by @nic_carter. To them, energy is a finite concept which means that Bitcoin miners are simply guzzling vast chunks of it to the detriment of other would-be users.

It is beyond puzzling even to see noted economists like Nouriel Roubini making such flawed equivalencies. So, when mining farm A in China and mining farm B in Iceland are in operation, the remaining parts of the world somehow suffer dips in energy supply?

Bitcoin mining cannot in any meaningful way affect global energy consumption more so than truly heavy industries like smelting plants and banks. Yes, you read that right, banks. Furthermore, many studies show that the process isn’t even as energy-consumptive as the critics say.

Off-Grid Utilization

Not content with ignorantly espousing misconceptions about energy consumption by Bitcoin miners, these critics go on to talk about environmental impact. Let’s make one thing clear — climate change isn’t something to be taken lightly.

However, critics who bring up this point either don’t know much about BTC mining or are deliberately misrepresenting facts. Many mining facilities around the world use off-grid renewable energy sources. There is the former Alcoa smelting plant in upstate New York which will have its own hydroelectric power source.

Huge Wind Farm to Power Bitcoin Mining Will Be Built in North Africa

In other places around the world, companies have established solar-powered and wind-powered mining centers. There is even the Upstream Data HashGen mining facility which uses natural gas to power its operations. In a recent tweet, the company revealed that it consumed 150,000 cubic meters of natural gas thereby reducing carbon emissions by more than 6,750 tons.

The fact of the matter is that many mining operations utilize what other industrial processes would consider nonviable energy sources. Furthermore, the quest for cheaper electricity is advancing the development of improved utilization of sustainable energy.

The Emergence of Second-Layer Protocol Implementations

The final part of the trifecta of ignorance for Bitcoin mining critics comes from a lack of understanding of the developments in the technology itself. Sorry, but “Bitcoin for Dummies” doesn’t come quite close to capturing the totality of the innovation within the industry.

Energy consumed in mining is due to the rapidly expanding volume of transactions on the chain. Well, what if we moved a large chunk of those transactions off-chain, or at the least the larger ones? That’s what projects like Blockstream’s Liquid Network and some others are trying to achieve.

Sidechains are other second-layer payment processing protocols are becoming a reality. Technology always moves towards greater efficiency and Bitcoin isn’t any different.

What other anti-Bitcoin rhetoric do you also find mind-numbingly dull? Let us know your thoughts in the comments section below.

Images courtesy of Twitter (@nic_carter, @UpstreamDataInc).