US government vs. Fidelity: stop offering Bitcoin to retail!
US government vs. Fidelity: stop offering Bitcoin to retail!
Bitcoin

US government vs. Fidelity: stop offering Bitcoin to retail!

By Andrea Porcelli - 22 Nov 2022

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Some US senators have urged Fidelity to stop its sponsoring partners from offering Bitcoin to its clients, describing investments in crypto as something unsafe and dangerous. 

Fidelity, whose full name is actually Fidelity Investments, is a US financial services giant, so much so that it is by far one of the largest asset managers in the world, with more than $4.5 trillion in assets under management and $24 billion in revenues. Among other things, it is well known for managing large pension funds.

The letter urging Fidelity to stop offering Bitcoin in its investments

Monday morning, via a letter addressed to Fidelity Investments, three prominent politicians once again came out against investment exposure to Bitcoin, especially for 401(k) pension funds.

Clearly, the motivation for members of parliament to weigh in on the matter is, as usual, the failure of FTX. Calling the event that saw the exchange platform fail, as symbolizing the disaster of “charismatic prodigies” like Sam Bankman Fried. 

The senators had already taken an opposing stance at the time of the creation of Fidelity’s Bitcoin 401(k) pension fund, and once again they did not fail to show their disapproval.

“Once again, we urge Fidelity Investments to reconsider its decision to allow 401(k) plan sponsors to expose Bitcoin plan participants.”

According to the US senators, the recent implosion of FTX perfectly illustrated the serious problems with digital assets. Perfectly demonstrating the risks and abuses consumers could be exposed to. 

“The industry is full of charismatic prodigies, opportunistic scammers and self-appointed investment advisers who promote financial products with little or no transparency.”

The three politicians involved in the letter go on to explain that the US is already facing a retirement crisis, and the intervention of these new plans based on volatile assets such as crypto would only go to aggravate consumers’ savings. 

Fidelity disagrees with the US and wants to launch its own trading platform

Fidelity still seems to want to navigate crypto adoption. In early November, it announced a waiting list for a new product, a free retail trading app for BTC and ETH.

In late October, a study conducted by the asset manager also found persistent interest among institutional investors in cryptocurrencies, despite the bear market. 

However, this enthusiasm seems to have waned since the bursting of the FTX bubble. These investors, according to the tabloids, are betting heavily on the downside.

In a survey published by Fidelity Digital Assets conducted between 2 January and 24 June 2022 among more than a thousand high-net-worth individuals and institutional investors, more than half of the respondents (58%) say they have already invested in digital assets such as Bitcoin.

In this regard, the President of Fidelity Investment puts it this way:

“With nearly six in 10 institutional investors surveyed investing in digital assets globally, understanding how investors interact with the ecosystem is increasingly important.”

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