An ongoing cryptocurrency bear market is not dampening interest for Fidelity’s new institutional cryptocurrency products.
spends $2.5 billion per year on technologies like artificial intelligence and blockchain. The new digital asset company was born out of the Fidelity Center for Applied Technology, or FCAT as employees call it.
Jessop said many institutional investors are still in “wait and see” mode when it comes to putting money into crypto.
“At some point, there will be an attractive entry point,” Jessop said. “But by the same token people don’t want to be early even if we’re well off the highs.”
Much of that hesitation has to do with volatility, he said. The digital currency market has been known to jump or sink by 10 percent in a single day. While prices in 2019 have been relatively stable, institutions are still wary of those sudden price moves, according to the Fidelity survey. That issue should be solved as the market structure matures, Jessop said.
Education is another roadblock to greater acceptance by investors. Jessop said the more educated a firm was on the topic, the more likely they were to be holding cryptocurrency.
“They’ve approached us wanting to learn, which is an encouraging sign,” Jessop said. “That’s not to say that there’s a cohort of people that once they get educated will still have a negative view.”