Fidelity Reiterates Bitcoin’s Unique Value as a Primary Investment Choice

Identifying assets with enduring value remains a pivotal concern for investors. Recently, Fidelity Digital Assets shed light on the distinct stature Bitcoin holds among digital assets, endorsing it as a primary consideration for investors. This narrative was further propagated by MicroStrategy’s Founder and Chairman, Michael Saylor, who shared Fidelity’s insights on Twitter on October 10, 2023, garnering over 300K views.

Bitcoin’s Distinguished Attributes Unveiled

A research study issued on October 4, 2023, by Chris Kuiper and Jack Neureuter under the banner of Fidelity Digital Assets, revisited the intrinsic characteristics that set Bitcoin apart from other digital assets. Titled “Bitcoin First Revisited: Why investors need to consider bitcoin separately from other digital assets,” the study builds on an initial analysis from January 2022. Over the span of a year and a half, Bitcoin has not only sustained its unique attributes but has witnessed an upward trajectory in adoption and market share, even as other digital assets encountered headwinds.

Positioning Bitcoin as a Monetary Good

The crux of the study hinged on recognizing Bitcoin as a monetary good, distinctly different from other digital assets due to its secure, decentralized nature, and sound digital money qualities. The authors assert that the prospect of any digital asset surpassing Bitcoin in these aspects is slim, as any such “improvement” would entail trade-offs. They propose that Bitcoin should be the introductory route for traditional allocators looking to delve into the digital asset space, emphasizing the need for separate evaluation frameworks for Bitcoin and other digital assets.

Fidelity’s Expanding Footprint in Bitcoin and ETF

Fidelity has been extending its stride into the Bitcoin realm through ETFs and other products, embodying its acknowledgment of Bitcoin’s unique value proposition. As of October 2023, Fidelity Investments offers a compact selection of 58 ETFs in the U.S., some of which provide exposure to the digital asset market, including Bitcoin. These offerings are a testament to Fidelity’s growing commitment to providing diversified investment avenues in the digital asset spectrum. The total assets under Fidelity’s ETFs amount to $36.24 billion as of October 7, 2023, showcasing the substantial footprint Fidelity has in the ETF domain.

Unpacking the Implications for Investors

Fidelity’s publication elucidates that the thriving nature of Bitcoin doesn’t spell doom for other digital assets; the broader digital asset ecosystem can cater to diverse needs and problem-solving avenues that Bitcoin doesn’t address. Yet, when it comes to serving as a reliable store of value in an increasingly digital world, Bitcoin’s position remains unrivaled. The insights furnished by Fidelity Digital Assets are poised to equip investors with a nuanced perspective, underlining the imperative of distinguishing between Bitcoin and other digital assets when orchestrating investment strategies.

The study thus serves as a cornerstone for shaping informed investment decisions in the digital asset spectrum, reinforcing the unparalleled value proposition Bitcoin brings to the table.

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How To Add Bitcoin To The Balance Sheet For Corporations, With Saylor & Dorsey

Is your company ready to buy the Bitcoin dip? Saylor and Dorsey will give you the 411 for free.99. The MicroStrategy World annual conference goes live on February 1st. Learn directly from these two titans of the industry, who have definitely been among Bitcoin’s main proponents and promoters over the last few years. 

Michael Saylor has led by example, buying every dip, and is a constant presence in mainstream media. His interviews are more like classes and the attention they get is outstanding. Jack Dorsey, for his part, left Twitter to focus on Bitcoin. Since then, his Block company announced several projects that’ll definitely strengthen the Bitcoin network from every angle.

About the MicroStrategy World conference, the press release promises it’ll be “focused on Enterprise Analytics and Bitcoin for Corporations. World 2022 is 100% virtual, and—for the first time ever—access to all sections of the conference is free of charge.” That’s an unbeatable price.

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What Will Saylor And Dorsey Talk About?

The conference has two sides, two different events that showcase MicroStrategy’s duality:

“The Enterprise Analytics event will introduce bold new ways to think about analytics and business intelligence, and showcase organizations who’ve used data as a strategic differentiator. The Bitcoin for Corporations event will explore the various benefits of incorporating Bitcoin into corporate initiatives.”

As you might expect, NewsBTC will focus on the second event. It’s important to say that both Dorsey and Saylor’s companies have Bitcoin on their balance sheet. These two put their money where their mouth is, and then some. In any case, what does MicroStrategy World promise?

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“An in-depth discussion on Bitcoin between two visionary voices: Jack Dorsey, CEO of Block, Inc., and Michael Saylor, CEO of MicroStrategy Inc. This session will be followed by a discussion on Bitcoin Treasury with Phong Le (President and CFO, MicroStrategy). Bitcoin for Corporations will also feature live interviews with industry experts from Coinbase, Deloitte, Fidelity Digital Assets, Genesis, Jefferies, NYDIG, Paxos, and Silvergate Bank.”

It’s noteworthy that Fidelity Digital Assets recently shocked the world by predicting more countries and probably a Central Bank or two would add Bitcoin to their balance sheet in the next few years. Christine Sandler, Fidelity’s Head of Sales & Marketing, will represent the company at the conference. 

Saylor ’s Recent Bitcoin History

Since MicroStrategy first added Bitcoin to its balance sheet in August 2020, the company has increased the bet every few months. They issued common stock. They sold stocks. They bought, and bought, and bought, and bought. In a recent interview, Saylor explained the strategy and NewsBTC reported:

“Look, our long term strategy is kind of like Harvard University. We’re running a university but we have an endowment. MicroStrategy is selling enterprise software. We generate $100 million in cash flow a year – in a good year – and we are reinvesting that cash in our endowment. Our endowment is 100% bitcoin.”

Saylor adds that MicroStrategy plans to acquire and hold bitcoin as a balance sheet. As for the operations, the company will continue to sell its enterprise software everywhere in the world.”

Related to this, about MicroStrategy’s free conference, Saylor said:

“We have gained a wealth of experience and expertise innovating our treasury strategy and evolving our corporate bitcoin acquisition strategy. And we’re pleased to be in a position to share our knowledge—via this curated event—for corporations looking to pursue similar strategies and bold initiatives.”

Dorsey’s Recent Bitcoin History

For his part, Dorsey’s strategy is much different than Saylor’s. He’s working in infrastructure. He’s fortifying the network’s weak parts. Among other things, Block announced they’re building a decentralized Bitcoin exchange called tbDEX. Released the Lightning Development Kit. And announced they’re working in an open-source ASIC miner

On a personal level, Dorsey and rapper Jay-Z put 500 BTC in a blind trust to promote Bitcoin development in Africa and India. And created the Bitcoin Defense Legal Fund to protect developers from all kinds of lawsuits.

BTCUSD price chart for 01/21/2022 - TradingView

BTC price chart for 01/21/2022 on Gemini | Source: BTC/USD on

The Price Of Bitcoin

Despite Saylor’s and Dorsey’s efforts, Bitcoin is bleeding. On one hand, Proof-Of-Stake proponents straight up lied before U.S. Congress in a hearing about Proof-Of-Work’s environmental risks. On the other, there’s a rumor that Russia is considering banning Bitcoin in some capacity. Both of those situations caused panic in the market, and Bitcoin’s price is currently 40% lower than the ATH of $69K. 

Will Michael Saylor buy the dip? 

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Fidelity Study Shows 70% Institutional Investors Eyeing for the Crypto Market

Despite institutional investment in the crypto market evaporating, a study conducted by Fidelity Digital Assets found out that 70% of institutional investors are still eyeing this field in the future.

Price volatility is considered as the biggest stumbling block to new entrants, followed by the lack of fundamentals needed to assess value and concerns around market manipulation, according to Reuters, citing the Fidelity study.

Yet, price volatility is not new to the crypto market, as evidenced by the fact that Bitcoin (BTC) shed off more than 30% of its value in a single day to hit lows of $30K on May 19 from an all-time high (ATH) price of $64.8K recorded in mid-April.

It, therefore, shows that new institutional investors in the crypto space are keeping fingers crossed to see how price volatility transpires. Meanwhile, around 90% are eyeing crypto investment in the next five years.

The study noted:

“Around 90% of those interested in investing in the future said they expected their company’s or their clients’ portfolios to include digital asset investments within the next five years.”

Additionally, more than half of the 1,100 institutional investors surveyed between December and April disclosed that they own crypto investments. Those interviewed included digital and traditional hedge funds, high net worth investors, financial advisors and endowments, and family offices. 

Market analyst Lark Davis recently stated that the amount invested by institutions and corporates in the BTC market was a small per cent of their total cash reserve. He noted that publicly traded companies had around 10 trillion in cash reserves, of which nearly 6 billion had been invested in Bitcoin. Therefore, out of the 41,000 publicly traded companies, less than two dozen had taken positions in BTC. 

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Fidelity Digital Assets to Hire 70% Staffs to Meet Rising Cryptocurrency Demand

Fidelity Digital Assets, a subsidiary of Fidelity Investment Inc., has announced plans to expand the number of its staff so that to meet the rising demands for crypto services from institutional investors, according to a Bloomberg report.  

The subsidiary intends to hire about 100 employees in technology and operations across Salt Lake City, Boston, and Dublin. Tim Jessop, the president of Fidelity Digital assets, said that the employees would assist in developing new products and expanding into other crypto assets apart from Bitcoin.  

Fidelity Digital Assets was established in 2018, and since the firm has been providing custody, trading, and other services for Bitcoin. 

In 2020, the year “was a real breakthrough year for space, given the interest in Bitcoin that accelerated when the pandemic started,” Jessop stated.   

Unlike most financial markets, which close in the afternoons and on weekends, Fidelity Digital Assets plans to provide cryptocurrency trading throughout most of the weeks. Jessop said that firm intends to be a place where the trading of crypto assets is full-time for most of the weeks.

Jessop acknowledged that the demand from institutional investors to get access to Bitcoin, Ether, and other virtual currencies is increasing. He stated that Fidelity Digital Assets has witnessed using interest in Ethereum cryptocurrency, so it wants to be ahead of that demand.

“Bitcoin has been the entry for a lot of institutions. It’s now really opening up a window on what else is going on in the space. A big shift is in “the diversity of interest” from new and existing customers,” Jessop said.

He disclosed that the first clients for Fidelity Digital Assets appear to be hedge funds and family offices. The number of corporations and retirement advisers seems to expand, who seek to hold crypto tokens as an asset class.

Why More Mainstream Acceptance?

After years of hesitation and resistance to adopt crypto assets, it appears that the floodgates are eventually opening, like retail outlets, credit card firms, banks, and even vehicle manufacturers are making major shifts.

With major endorsements from Silicon Valley billionaires such as Jack Dorsey and Elon Musk, Bitcoin price rose to $65,000 this year, with some speculating that it could hit $100,000 by 2022.

Major companies such as credit card giant Mastercard, Apple Inc, Tesla, and others have moved into the sector. Despite Bitcoin declined its value and currently trading at $33,226 due to regulatory concerns, firms continue to accept the cryptocurrency for transactions or invest heavily into it with corporate finance itself.

This year began with a rush by institutional and retail investors searching for dollar alternatives and high-yielding assets amid rock-bottom or even negative interest rates globally. 

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Fidelity Digital to Expand Staff by 70% Amid Crypto Boom

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The president of Fidelity Digital Assets said that many clients are particularly interested in Ethereum. 

Fidelity Digital Assets Set for Growth 

Fidelity Digital Assets is building out its operation. 

The asset management unit, which forms part of institutional-focussed firm Fidelity Investments Inc., is planning to grow its team by 70% due to high interest in the crypto space among clients. 

Tom Jessop, president of Fidelity Digital Assets, told Bloomberg that the firm intends to add 100 staff that will work on developing products and diversify the firm’s offerings beyond Bitcoin. He said: 

“We’ve seen more interest in Ether, so we want to be ahead of that demand.” 

Jessop also commented that 2020 was a “breakout year” for the crypto space, which saw an acceleration due to the Coronavirus pandemic. Many investors turned to Bitcoin as an inflationary hedge amid unprecedented money printing, helping the asset hit highs of $64,000 in April 2021. Ethereum also soared along with many other tokens before a market-wide crash in May. 

Fidelity Digital Assets currently only offers custodial services for Bitcoin, but the growing interest in Ethereum could mean that changes soon. Jessop added that the firm plans to offer trading on a more frequent basis so that it’s “full-time for most of the week.” 

Jessop added that demand for crypto has risen among institutional investors, with Bitcoin acting as a gateway to other assets. “It’s now really opening up a window on what else is going on in the space,” he said. 

Fidelity has taken clear steps to double down on the crypto boom throughout this year. In March, it filed an application for a Bitcoin ETF. It’s currently pending approval with the SEC.

Disclosure: At the time of writing, the author of this feature owned ETH, ETH2X-FLI, and several other cryptocurrencies. 

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Silvergate Capital Corporation Reveals Fidelity Digital Assets as Custody Provider for BTC Collaterized Loans

Silvergate Capital Corporation has added Fidelity Digital Assets as a custodian for SEN leverage. This makes Fidelity Digital Assets the second major custodial services to join Silvergate in a week following Coinbase Custody’s addition. 

Fidelity Clients to Access Silvergate Loan Opportunities

This development was announced in a press release by Silvergate on March 29, 2021. According to the report, the development will enable Institutional investors who store their bitcoin with Fidelity Digital Assets easy access to SEN Leverage. 

SEN Leverage is the primary product of Silvergate Capital and provides secure institutional access to capital through U.S dollar loans collateralized by bitcoin. SEN Leverage allows institutional investors to receive cash inflow by entering into a loan agreement with Silvergate Bank. 

The bank uses its proprietary payment network Silvergate Exchange Network to process the loan. In return, investors use bitcoin as their collateral held by Fidelity Digital Assets in a cold storage account. 

Jon Melton, director of digital asset lending at Silvergate believes that the bank is well-positioned to become a major player in the lending sector. “With Fidelity Digital Assets on board, we’re combining our exceptional lending program with a leading custody services platform, providing investors with greater access to capital,” he further added. 

Christine Sandler, head of sales and marketing at Fidelity Assets, offered similar sentiments about the partnership. “Like Silvergate, we recognize the opportunity to create a more seamless investor experience by helping institutions maximize capital efficiency, as well as the opportunity to strengthen the digital assets ecosystem through greater integration and collaborations like this,” she said. 

SEN Leverage is a financial product backed by Silvergate and is one way the U.S bank is looking to leverage increasing interest in digital assets. The ability to use bitcoin as collateral shows the growing change in the traditional finance system as the leading coin is regarded as an asset of value. 

Institutional Adoption on the Rise

Institutional adoption of crypto assets has witnessed significant growth in the past six months. More traditional financial companies have begun to offer crypto-based services as demand levels continue to grow. 

Earlier in March 2021, BTCManager informed that Jamie Dimon’s JPMorgan had listed a massive 56 vacancies for distributed ledger technology (DLT) professionals, making it clear that it’s aiming to strengthen its blockchain division. 

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Lending Firm BlockFi Launches Bitcoin Trust

Crypto lending platform BlockFi has revealed the launch of its Bitcoin Trust. This was revealed in a press release on Tuesday and signaled the next phase for the lending platform. 

Bitcoin Trust Added By BlockFi 

BlockFi had registered the bitcoin trust with the Securities and Exchange Commission (SEC) in January, according to a public filing. This was after it had fulfilled the requirements from the regulatory body. 

According to the report, the Fidelity Digital Assets will hold the custody of the bitcoins represented with the Trust. Fidelity Digital Asset is the cryptocurrency arm of the investment group Fidelity Investments. Also, Grant Thornton LLP serves as the auditor with Coin Metrics, providing index and pricing data for the Trust. 

Furthermore, the Trust will be issued via private placements and reflect the value of BTC held inclusive of the Trust’s expenses and other liabilities. BlockFi also revealed that the shares would be available to global institutions in the nearest future. 

“Trust shares will be available to global institutions and other qualified investors in the near-term, and later this eligibility will be expanded to include accredited individual investors in the U.S,” BlockFi stated. 

With the launch, BlockFi can join a select list of firms that offer bitcoin trusts. Bitcoin trusts are viewed as a significant investment tool that enables institutional investors to access cryptocurrencies in a regulated environment. 

Major Milestone

Speaking on the development Zac Prince, BlockFi CEO, expressed his opinion on what the launch means to the lending platform.

He said:

“Given the level of institutional activity in recent months and demand for new, professional-grade investment vehicles, the timing of BlockFi Bitcoin Trust is ideal.”

He further added that the company would continue to expand the bitcoin trust to a retail brokerage. As we work to broaden the availability of this vehicle to retail brokerages, we expect this product will facilitate more significant investments in digital assets – at the core of BlockFi’s mission in bridging crypto with traditional finance,” He concluded. 

BlockFi is considered one of the top lending platforms in the crypto space. Since its launch, the lending platform has made massive profits generating $100 million in revenue. This latest development will boost BlockFi revenue as more institutions will be able to access bitcoin. 

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