Fidelity Adds Institutional Ether Trading As Investors Await Bull Market, Regulatory Clarity

Institutional clients of Fidelity Investments’ digital assets-focused subsidiary will be able to trade and custody ether (ETH) starting today.

Ethereum’s native token will be the second cryptocurrency after bitcoin available on Fidelity Digital Assets’ platform, which counts hundreds of institutional clients, according to the firm. Earlier this month, the company registered an Ethereum
ETH
index fund, which tracks the corresponding index reflecting the performance of ether in U.S dollars, with the Securities and Exchange Commission. According to an Oct. 4 filing, the vehicle has over $5 million in investments, with the minimum required amount of $50,000.

The latest move follows Ethereum’s transition to a nearly carbon-neutral model and changes in the economics of ether, completed in September.

In response to Forbes’ request for comment about the new institutional ether trading offering, a company spokesperson pointed to an earlier statement: “As the marketplace for digital assets grows, Fidelity recognizes the need for a diverse set of products and solutions that help customers gain exposure in a manner that aligns with their distinct financial objectives and risk tolerance. We have continued to see client demand for exposure to digital assets beyond bitcoin.”

Ric Edelman, a financial advisor and founder of the Digital Assets Council of Financial Professionals, says the news is “long expected but nevertheless exciting. It reaffirms the importance of Ethereum in the crypto field and gives investors confidence about investing in crypto,” he writes in a comment to Forbes.

However, he adds, “investor attention is largely elsewhere—the global macro environment.” Right now, institutions are awaiting regulatory clarity and the next crypto bull market, both expected within the next 12-24 months, he writes.

Mark Connors, head of research at Canada-based digital asset manager 3iQ, says moves like this actually “put pressure on regulators to advance the already accelerating pace of regulatory efforts in the U.S.”

So the asset manager seems to be playing a long game. According to sources close to the company, Fidelity Digital Assets has about 400 employees and plans to add approximately 100 more within six months.

Additionally, the Wall Street Journal reported in September that the parent Fidelity Investments is weighing a plan to allow individual investors to trade bitcoin on its brokerage platform. In April, Fidelity said it would allow retirement savers to put bitcoin in their 401(k) accounts later this year.

The company currently provides an exchange-traded fund (ETF) focused on metaverse investments and another one for crypto and digital payments.