The thing that the “biggest clients” of US-based mutual fund giant Fidelity have been the most interested about has been bitcoin (BTC), and though interest in ether (ETH) has been rising, it’s not even close to that of BTC, said Christine Sandler, head of sales and marketing for Fidelity Digital Assets.
In an interview with news outlet The Boston Globe, as reported by Techtelegraph, Sandler said that BTC is still the key focus for the mutual fund, as more traditional institutional investors consider this the entry vehicle to the cryptocurrency space.
Up until earlier this year, “90% of what Fidelity’s biggest clients were asking about was bitcoin”, Sandler said. Interest in ETH “has been escalating in the last few months, but it’s not anything close to what we see in bitcoin.”
One of the reasons for this interest might be the coronavirus pandemic, said Tom Jessop, the president of the company’s digital assets unit, stating:
“What really got people off the fence was the pandemic, because you’ve got this scarce asset class—there will only ever be 21 million bitcoin created—and an environment where our currency is being debased, and there’s a ton of money printing.”
Additionally, even some central bankers have argued in favor of the benefits of using bitcoin and other cryptoassets as a hedge against inflation: “That’s when the match was set to the bonfire,” Jessop says.
The fund is looking to offer crypto-related investment products, like their Wise Origin Bitcoin Index fund, to investors other than wealthy individuals and hedge fund managers, pending approval from the US Securities and Exchange Commission (SEC). Exchange-traded funds (ETFs) are much more accessible than purchasing BTC outright, Jessop added.
On the other hand, the environmental impacts surrounding crypto mining are still concerning to potential investors.
To address this, Fidelity has its own small bitcoin mining company that relies upon hydropower from Canada and other renewable sources, but they are also investing in other mining companies that use renewable sources. Peter Jubber, managing director of Fidelity Digital Funds, said that the fund’s own mining effort is still fairly small scale, and is “focused on learning, experimentation, and understanding how the entire bitcoin-blockchain ecosystem has evolved over time.”
Their other investments include crypto-related startups, which help the fund keep an eye on what is happening in the industry.
Still, crypto is in its early days, according to Jessop, and what we are seeing now is an emergence of a “real asset class” as investors get more educated about ways to seek upsides.
Media reports have claimed that Fidelity is looking to expand its crypto offerings beyond bitcoin and offer ETH to its hedge fund, family office, and institutional clients in 2022.
Still, Jessop added that, “I don’t think we’ll ever be the most full-service provider, in terms of asset coverage,” as he wants to focus on security and diligence in choosing which crypto assets to include in their offerings, he said.
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