As an institutional investment firm, Fidelity Investments has deep roots in the blockchain world. They created a special division called Fidelity Digital Assets which began research and development efforts in 2014, and even started mining Bitcoin in 2015. As one of the earliest investment firms to embrace crypto, they started a full-service enterprise-grade platform for securing, trading and supporting Bitcoin last year. Yesterday, it was reported that Fidelity will launch its first fund dedicated to Bitcoin, called the Wise Origin Bitcoin Index.
Not much is known at this time, but the following details were included in the media report:
- It will be a passively managed Bitcoin-only fund
- Investors will be limited to qualified purchasers through family offices, registered investment advisers and other institutions
- The minimum investment is $100,000
The new Bitcoin fund will take on Greyscale Bitcoin Trust, which brought in more than $900 million in the second quarter alone. It also comes on the heels of Fidelity Digital Assets validating a stock-to-flow valuation model authored by Plan B (pseudonym), which predicts Bitcoin’s price at $1 million. It's notable that while both Fidelity and Greyscale are targeting high net worth customers for their respective funds, Greyscale still makes their product available for retail customers. Greyscale may have the head start, but I wouldn't underestimate Fidelity's resources to grow their fund.
The news is exciting and provides additional evidence that crypto investments are becoming more accepted by the general public. In fact, 36% of Fidelity's surveyed respondents were already invested in digital assets, while 60% said digital assets had a place in their portfolio.
So what are your thoughts about Bitcoin's valuation? Do you agree that one Bitcoin will be worth $1 million?
Thanks for reading, and stay safe!
Last edited August 27, 2020
Logos by Fidelity Investments and Greyscale Bitcoin Trust