Tom Jessop, Fidelity Investments head of corporate business development and digital assets, said an internal survey of institutional investors showed there is “an extremely high percentage interested in this space.”
His comments were made during the Institutional Crypto Conference at Bloomberg Headquarters on Monday where Fidelity announced a new subsidiary with 100 employees to provide “institutional solutions for a new asset class.”
They will start off with bitcoin and ethereum, providing custody as well as the option of bitcoin/eth trading by tapping into a number of exchanges to get the best price.
Fidelity serves 13,000 small funds, broker-dealers and intermediaries, Jessop said, with the institutional investment market being the obvious first choice.
Others provide retail focused solutions, he said, but institutions interested in this space are not served to their standard. Core infrastructure can be repurposed however, but going institutional is a first good step, he said.
They are currently onboarding some clients, with Mike Novogratz of Galaxy Digital being an alpha customer. “Any big institutional player helps credentialize this space,” Novogratz said, so he was happy to be one of the first customers.
Novogratz suggested pension funds are planning to enter this space. Had a convo this morning, he said, still a few months away. Late first quarter early second quarter of 2019 by the time some funds allocate some percentage. Gotta figure what bucket, commodity, security, alternative.
He said now there are announcements here and there being made, saying hey we open for business. Institutional investors then have to run some water through pipes. First/second quarter until pensions say hey maybe we should put 50 basis points into cryptos, Novogratz said.
The adoption cycle has gone from early adopters to sophisticated family offices, who manage lots of assets, allocating significant amount of capital to...