Recently, Fidelity Investments, a well-renowned Wall Street giant, announced that it will be forming a separate company for handling trades of cryptos for the institutions. This news has sent ripples across the ocean of the crypto market as it comes off very positive for the proponents of cryptocurrencies. So how is the cryptoanalyst family looking at this news? The answer, with joy.
BlockPublisher got in touch with Thomas Power, a board member at Blockchain Industry Compliance and Regulation Association (BICRA), to get an expert opinion regarding the news. When asked if he had any word to describe the fidelity news and is the institutional acceptance expected to increase as a result of this, Thomas stated:
Joy. Tipping point. To me it’s the beginning of the crypto tipping point.
Cryptocurrencies do not lie in the good books of institutions owing to the issues that they possess like volatility, manipulation, lack of regulation, the prevalence of illegal activities etc.. The general public and institutional investors usually hold themselves back from entering the ‘dirty’ market of cryptos. There is a lack of an official channel through which institutions can enter this nascent market of digital currencies.
But with the announcement made by Fidelity, more and more institutions are likely to step in the game of crypto trading now. Thomas Power termed it as the tipping point for the crypto universe. Institutional acceptance will surely help this market grow and mature as the time moves forward.
Another important step needed for increasing the general acceptance of cryptos among the investors is the establishment of an exchange-traded fund (ETF). With this step made by Fidelity, confidence among the institutions regarding crypto is expected to increase along with the demand for a crypto-linked ETF.
The crypto world is awaiting further verdict from the United States Securities and Exchange Commission (SEC) regarding an ETF next month. Although it might look like this development intended to be made by Fidelity might tip the SEC’s decision in favor of the crypto world, there are still a lot of issues associated with the world of crypto that need to be solved first. Thomas Power is of the view that we will most likely see an ETF in 2019. Upon asking whether the Fidelity news will tip SEC towards the approval of an ETF, Thomas stated:
No, way too early.