Fidelity Investments may provide its clients with access to Bitcoin trading through its brokerage platform, according to a report from the Wall Street Journal. The company has been very engaged in the crypto markets and has already announced products that will offer their wealthy clients exposure to cryptocurrency.
The new strategy will potentially expand the company’s Bitcoin offering to its 34.4 million brokerage accounts, according to sources cited by The Wall Street Journal. The strategy was suggested by Galaxy Holding, one of Fidelity’s biggest clients, CEO and crypto bull Mike Novogratz.
In a speech at the SALT conference, Novogratz said the following, according to the report:
A bird told me that Fidelity, a little bird in my ear, will soon transition its retail customers to crypto. I hope that bird is right. And so we are witnessing this institutional march.
The potential supply has yet to be disclosed to clients of the investment firms, but like other banking and financial institutions, Fidelity said demand for Bitcoin and crypto exposure is driving the these offers.
Fidelity under scrutiny for their Bitcoin offering
For the past few months, Fidelity has been under the radar of US government officials as the company aims to expand its Bitcoin offering and products. As Bitcoinist reported, a group of US senators led by Elizabeth Warren sent a letter to Fidelity CEO Abigail Johnson.
Government officials inquired about the product and a potential violation of instructions issued by the US Department of Labor to allow 401(k) accounts to gain exposure to Bitcoin. These accounts are used by a large majority of US citizens to save for retirement.
In this sense, the Senators deemed Bitcoin and crypto assets unworthy of being used as a long-term investment. The letter classified the fledgling asset class as “volatile, illiquid and speculative”. The document stated:
While we appreciate Fidelity’s efforts to help American workers enjoy a more secure retirement, this decision is extremely troubling. Perhaps most troubling is that by highlighting the risks of investing in Bitcoin on its website and planning to limit participants’ exposure to the plan to 20%, Fidelity is acknowledging that it is well aware of the dangers associated with investing in Bitcoin (…).
Whether the strategy of offering Bitcoin trading on its brokerage accounts will attract the same level of attention from US government officials remains to be seen. At the time of writing, the price of BTC is trading at $22,400 with a 4% profit in the last 24 hours.