Clients Are in no Urgency to Save CryptocurrencyDecember 4, 2018
Fidelity Investments is all set to expand its custodian services to other assets in the cryptocurrency market. This means they will be extending their services beyond the Bitcoin.
Tom Jessop, is the head of Fidelity Digital Assets. Fidelity Digital Assets, is a custodial service that is operated by Fidelity. They have been researching the demand level for the top cryptocurrencies. Subsequently, they are to integrate support levels for other asset types.
A Block FS conference was held in New York. The conference mainly discussed how financial institutions would be able to scale the potential benefits of blockchain technology. Fidelity participated in the event, and one of the Fidelity executive during this event stated that from the point of view considering the market cap of cryptocurrencies, there is a requirement for those currencies until the fourth or fifth ranks. Therefore, he stated they would be looking at that.
Market giants are waiting for clarity on the regulatory parameters set by the regulatory bodies. They are also researching into whether there is a demand level for cryptocurrency among customers. When both of these significant trendsetting deals are underway, Fidelity has boldly ventured into assessing the demand level of the existing market. Fidelity probably checked in to what the regulators might proactively impose on these businesses. And they have made an early bird decision in this regard.
The cryptocurrency infrastructures are being built and patented by significant institutions. A recent study by Coin base revealed that a minimal investment of $5 million would be required when venturing in to develop and work on the infrastructure for this industry.
There is absolute uncertainty as to the demand level for the cryptocurrency. In the current trend, the only way to assess the market demands is to assess the performance levels of the custodians who are already there in the space.
Over the past 11 months, the overall cryptocurrency has lost nearly 85% of its market value. The demand for the cryptocurrencies has also declined ever since early January.
However, adding additional digital assets will require changes to the existing infrastructure. This is for the infrastructure that is being used to offer the custodian solution. There is sufficient demand from institutional investors in this regard. And, they are already justified about their perception of investing more resources into this product.
Jay Biancamano, the managing director of State Street, is responsible for digital product development and innovation. When speaking at a New York conference, he stated, that their clients are not in any urgency to move to this asset class. Though there is a high level of interest, there is no proved need to make a move right now. He further added that none of their clients are looking store these assets in custody.