Fidelity Investments has said it will offer commission-free trading services to its retail customers for Bitcoin (BTC) and Ether (ETH) transactions. According to market reports, the move is part of the company’s efforts to recognize the growing mainstream interest in digital assets.
CNBC reports reveal that Fidelity’s subsidiary, Fidelity Digital Assets, will power the new crypto offering named Fidelity Crypto, giving retail investors a chance to buy and sell Bitcoin and Ether with minimal fees.
With an initial focus on BTC and ETH, Fidelity Crypto will not charge a commission. Instead, the company will charge a 1% spread on trades, giving it a chance to make some money, according to a statement on the website. Financial markets define ‘spread‘ as the difference between the buy and sell prices attached to an asset. The subsidiary, Fidelity Digital Assets, will offer this service.
While Fidelity Investment has yet to specify when Fidelity Crypto will go live with the new offering, the brokerage has unveiled an early-access waitlist where interested users can join. According to Fidelity Investment, the target is retail investors, slated to enjoy commission-free crypto trading, seeing as the lion’s share of its clientele is already neck-deep into digital assets investments.
Speaking to CNBC, the firm said:
“A meaningful portion of Fidelity customers are already interested in and own crypto. We provide them with tools to support their choice so that they can benefit from Fidelity’s education, research, and technology.”
Among the cryptocurrency exchanges frequented by Retail investors who typically buy digital assets are FTX Trading Ltd., Coinbase Global Inc., and brokerage apps like Robinhood Markets Inc. Therefore, the new feature under Fidelity Crypto puts the firm in direct competition with the retail trading app Robinhood Markets (HOOD) and crypto exchange Binance. The two companies already offer users the opportunity to trade crypto absent any commission.
Fidelity Digital Leveraging the Bear Market
Amid the bear market, Fidelity Investment has broadened its institutional offerings after the recent launch of its Ether custody and trading services to the high-net-worth customer base. The move, therefore, passes as a big deal for the crypto industry, as Fidelity is a big company with a record of over 34 million brokerage clients.
The commission-free provision, therefore, paves the way for increased cryptocurrency adoption and is a positive catalyst for the company, given that Fidelity has been expanding its involvement in the emerging space. Barely two weeks have passed since Fidelity Digital Assets disclosed plans to increase its employee base by bringing in an additional 100 workers over the next three to six months. The company will have around 400 staff in its register if this happens.
The brokerage also declared in April, announcing plans to provide retirement savers a chance to invest in Bitcoin directly via their 401(k) accounts. The company has been a critical advocate for crypto adoption, focusing on Bitcoin and digital assets, terming BTC an ‘only form of money with the potential to grow in acceptance.
While most of the brokerage’s efforts have been channeled toward institutional investors, there has also been growing speculation about its retail offering. One such instance is a September statement by Galaxy Digital CEO Mike Novogratz, who announced that Fidelity would soon provide retail access to crypto.
About Fidelity Investment
Based in Boston, Fidelity Investments ventured into crypto in 2018. It began by offering custody services to hedge funds, family offices, and trading firms for their digital assets. Only now, the company had been skeptical about extending crypto trading services to its expansive retail customers.
However, Fidelity Investment is a giant in mutual funds and financial advice. The brokerage is looking for ways to include young folk in the crypto community as part of its clientele, which explains the move to design a new mobile app that targets young adults. The company has also introduced an investment account for teenagers.
According to a Bloomberg report in June, the company collaborates with fellow retail brokerage Charles Schwab Corp. and companies like Citadel Securities and Virtu Financial Inc. to develop a crypto trading platform. The website shows that by the end of September 2022, Fidelity Investments recorded $9.6 trillion in assets management.