Fidelity Crypto is a go: $4.5 trillion firm launches retail crypto trading
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(Kitco News) – Investment giant Fidelity has launched their new retail crypto trading accounts, moving deeper into the beleaguered cryptocurrency ecosystem despite pushback from U.S.lawmakers.
“Fidelity Crypto is your opportunity to buy and sell bitcoin and ethereum in the Fidelity Investments App,” the company wrote on their website, promising clients the ability “to trade crypto with as little as $1 while also having an integrated view of both your traditional and crypto investments.”
Earlier in November, Fidelity announced plans for the platform and offered customers the opportunity to join an early-access list.“Where our customers invest matters more than ever,” Fidelity said at the time.“A meaningful portion of Fidelity customers are already interested in and own crypto.We are providing them with tools to support their choice, so they can benefit from Fidelity’s education, research, and technology.”
As of launch, the only cryptocurrencies available to trade on the Fidelity Crypto platform will be bitcoin and Ethereum, but Fidelity wrote that “additional cryptocurrencies are being evaluated to expand trading opportunities over time.” Fidelity Crypto accounts will not be able to receive or send cryptocurrency transfers as of the launch date.
The platform promises “commission free” crypto trades, but the company said “a spread of 1% will be factored into every trade execution price.” Fidelity said that 1% is the maximum rate, and they may choose to apply a lower spread percentage or no spread at the beginning.
Fidelity Crypto will be available in 35 U.S.states at present, including California, New York, Texas, Florida, Massachusetts, Pennsylvania, and New Jersey.Customers living in states where it is not yet available can add their names to an early-access list to be notified when the platform is approved.
The launch of Fidelity Crypto comes at an awkward moment, as the crypto winter has seen the value of blockchain-based assets decline from $2.9 trillion in total market cap to $820 billion today, and the contagion from the recent collapse of FTX further batters crypto.
After Fidelity announced in April that it was preparing a plan to allow 401(k) holders to allocate up to 20% of their retirement savings into Bitcoin (BTC), lawmakers in the U.S.
condemned the move.
On Nov.21, Senators Richard Durbin, D-Ill., Elizabeth Warren, D-Mass.and Tina Smith, D-Minn.sent a letter to Fidelity Investments CEO Abigal Johnson asking that the firm reconsider a decision to allow retirement plan participants to invest in the cryptocurrency.
“Fidelity Investments has opted to expand beyond traditional finance and delve into the highly unstable and increasingly risky digital asset market,” the senators wrote.
“The recent implosion of FTX, a cryptocurrency exchange, has made it abundantly clear the digital asset industry has serious problems.”
The senators strongly urged Fidelity “to do what is best for plan sponsors and plan participants – seriously reconsider its decision to allow plan sponsors to offer Bitcoin exposure to plan participants.”
They cited the increasingly “volatile, tumultuous and chaotic” nature of the crypto market in 2022 as the reason for their request.The trio holds considerable sway on financial matters as Durbin is the number-two Democrat in the Senate as Majority Whip, while Smith and Warren are on the Banking Committee.
New York Attorney General (NYAG) Letitia James took matters further, sending a letter to members of Congress on Nov.22, asking them to craft legislation that prohibits crypto investments in defined contribution plans and individual retirement accounts (IRAs).
James also called for the rejection of the recently proposed Retirement Savings Modernization Act and the Financial Freedom Act of 2022, which were crafted with the intention of allowing investments in digital assets.
The AG specifically pointed to the collapse of Terra/Luna and the implosion of FTX as examples of the threats from which she is looking to protect investors..