As much as cynics like to say crypto is dead, this may not exactly be the case. Rumor has it that in spite of the crash in the Bitcoin price, interest in this nascent asset class and related technologies is abound. A recent tweet from a leading industry investor, who likely cited his first-hand experience, would confirm this trend.
Fidelity’s Crypto Culture Is “Bonkers”
Ari Paul, the founder & chief investment officer of BlockTower Capital, claims that Fidelity Investments, a Boston-based financial services giant, has a cryptocurrency culture that is “bonkers.” The investor remarks that there are “hundreds of passionate advocates” of the innovation from the C-Suite to the lower rungs of the executive ladder, accentuating that Wall Street sees value in this ecosystem. In fact, Paul states that in 2015, the chief executive of the institution herself, the esteemed Abigail Johnson, was personally mining Bitcoin, right in her lofty office. He adds that there are more crypto-focused staffers at Fidelity than the “five biggest industry funds combined.”
Fidelity’s cryptocurrency culture is bonkers. Literally hundreds of passionate advocates at every level of seniority at the firm. They have more people working on crypto than the 5 biggest crypto funds combined.
— Ari Paul (@AriDavidPaul) March 27, 2019
This might not be hearsay either. In an interview with industry journalist Laura Shin, Tom Jessop, the head of digital assets at the American powerhouse, explained that the company has an R&D branch that has had its eye on cryptocurrencies since 2013-2014. He notes that once upon a time, the company even had an internal pilot that allowed employees to purchase food for Bitcoin, underscoring Fidelity’s long-standing support for what many traditional economists have deemed the devil’s spawn.
This uplifting comment comes as Fidelity recently became the first mainstream finance company to launch its own fully-fledged cryptocurrency division — Digital Asset Services (FDAS). For those who missed the memo, FDAS’ custodial solution and trade execution platform reportedly recently soft-launched to a “select” list of clients — an assumed dozen or so. While a dozen is far from all the world’s institutions, this forward-thinking facet of Fidelity is looking to expand its horizons.
In an interview with Frank Chaparro at The Block, Jessop explained that out of the 450 institutional clients (diverse data set) it interviewed, 20% had either an active interest in cryptocurrency or an intent to foray. Extrapolating that number to Fidelity’s ~20,000 clients in that subset, 4,000 institutions alone could harness what FDAS has to offer.
Maybe the bears should calm their incessant beating of the “crypto is dead” drum.
Bitcoin Institutional Interest Abound
All this only goes to show that 2018’s downturn hasn’t done much to quell interest in cryptocurrencies.
Endowments have begun to clamor for investment opportunities in this budding space. The University of Michigan’s endowment, which has $12 billion in assets, recently announced its intentions to siphon more of its funds into crypto-centric funds in the near future. Per a Board of Regents agenda, the institution has its eyes on a “cryptonetwork technology” (they likely mean blockchain technology) fund managed by the world-renowned Andreessen Horowitz. More specifically “CNK Fund I,” as the vehicle in question has been dubbed by the Menlo Park, California-based venture group that backs it, is currently in the University of Michigan’s scopes. According to Kevin Hegarty, the chief financial officer at the state-run educational institution, CNK invests in “cryptonetwork technology companies across the spectrum of seed, venture and growth stage opportunities.”
American pension funds, two from Fairfax County, Virginia to be specific, have also started to “get off zero,” as Morgan Creek Digital’s Anthony Pompliano would say. The state’s police force and government employee pension plans recently led a fundraising round for Morgan Creek’s latest venture, a $40 million fund centered around garnering equity in leading upstarts, like Bakkt, Coinbase, and Harbor, and allocations in physical cryptocurrencies.’
As reported by BlockGeeks previously, Visa, too, plans to get its hand in some crypto pies. In a job posting recently pinned to SmartRecruiters, it was revealed that Visa is looking for a “technical product manager.” This, of course, doesn’t scream “crypto” or “blockchain,” but the job description sure does. For this position, the multinational payment processing giant is looking for a product manager for its Visa Crypto team, based in Palo Alto. Said individual will need to “possess significant functional knowledge of the cryptocurrency ecosystem,” with a preferred familiarity of cryptography.
But what fruit will these forays bring? Some fear it could be more centralized ‘cryptocurrencies’, like JP Morgan’s Quorum-based stablecoin that will be centralized to high hell. But some are confident that somehow, someway, institutions will smarten up, and open their arms to decentralized cryptocurrencies as they realize their potential.
Title Image Courtesy of Samson Creative Via Unsplash
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