Crypto

Fidelity’s crypto platform is opening soon. Will it be okay? – Nerd Wallet

Fidelity Investments on Thursday opened the waitlist for its new crypto investing service for individual investors, a move that could introduce digital assets to the company’s roughly 40 million individual clients for the first time.

Fidelity Crypto could be an attractive offer for curious investors cryptocurrency and already know and trust Fidelity with their investments.

But if you’re already an inveterate crypto investor, chances are you’re not interested in just switching to these new offerings. While Fidelity’s low trading costs are competitive with some of the major crypto exchanges, the company’s advertised crypto selection and features still fall short.

For example, Fidelity will initially only offer two cryptocurrencies: Bitcoin and Etherum. And users won’t be able to send or receive cryptocurrency from their accounts, a must for users who want to use crypto for payments or to access blockchain-based services on the web. You will, however, be able to sell crypto for fiat currency.

Why you might want to register

You can join the Fidelity Crypto Waitlist on Fidelity’s website, although the company hasn’t said when it will start offering the service. Here are some factors to consider while you wait.

Crypto trading fees

Fidelity offers its clients what it describes as “commission-free” crypto trading. This does not necessarily mean that the trade is free. The company claims that it will take a spread of up to 1% on crypto trades.

Still, it’s relatively good compared to other crypto services reviewed by NerdWallet. Coinbase, the largest US-based exchange focused solely on crypto, often charges a fee of $2.99 ​​on simple transactions, which would exceed 1% on small purchases.

Other crypto services can have much higher fees, with some going as high as 10% depending on how you pay.

Funding and minimums

Funding a Fidelity Crypto account can be easy if you already have a brokerage or cash management account with the company. You will be able to transfer money from Fidelity accounts to Fidelity Crypto.

There is no minimum deposit to open a crypto trading account. And the minimum crypto purchase will be $1, says Fidelity. These factors put the company on par with most other leading exchanges.

If you do not have a Fidelity account, to make purchases you will need to create and fund an account such as a brokerage or cash management account.

Why You Might Want to Use Another Exchange

Availablity

Fidelity Crypto will initially be available in 35 states. If you cannot access the service in your state, you will need to choose another option.

You can still join the waitlist if your state is not included, but you won’t be able to use the service unless Fidelity expands its crypto services.

Crypto selection

Fidelity Crypto offers will be among the lowest of the cryptocurrency platforms reviewed by NerdWallet. Certainly, Bitcoin and Ethereum are the two most valuable cryptocurrencies, which means that they are widely used and relatively well established in this emerging sector.

However, cryptocurrency traders often look at more options when buying and selling. Crypto.com, another major cryptocurrency exchange, has over 250 cryptocurrencies for sale. Other brokerages also have more crypto options. Webull, for example, has around 40.

Fidelity may follow the path of other brokerages, such as Robinhood, which started with limited crypto offerings and then expanded over time.

It’s not immediately clear whether Fidelity will allow users to trade cryptocurrency for each other, a feature that major competitors typically offer.

Feature

Fidelity Crypto will not offer some of the advanced features available on competing exchanges. It will not allow staking, a process that allows owners of certain cryptocurrencies to earn interest-like rewards.

And unlike some other crypto exchanges, Fidelity Crypto will not offer 24-hour crypto trading, with limited trading from 4 a.m. to 12 p.m. Eastern Time.

Finally, the company claims that it will not allow customers to transfer cryptocurrency out of their accounts or to external crypto wallets.

Transfers are crucial if you want to do more with the cryptocurrency than hold onto it in the hope that it will increase in value. You will not be able to use crypto purchased through Fidelity on decentralized financial productsfor example.

The bottom line

While Fidelity’s first trial of a consumer crypto product may not be the strongest on the market, the company’s brand name and track record may give some customers a level of comfort in moving to a new class of crypto. risky assets like crypto. And the company has left the door open to expand its features and capabilities later.

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