Mike Novogratz, Founder and CEO of Galaxy Digital LP, and Tom Jessop, the founding head of Fidelity Digital Assets recently spoke at the Institutional Crypto Conference where they discussed Fidelity’s cryptocurrency business and institutional investors entering the crypto space.
Fidelity Investments entered the crypto space with the launch of Fidelity Digital Assets on 16th October. Jessop stated that their goal is to “provide training solutions to institutions who are increasingly allocating to this asset class family”. Stating this as a “great business opportunity”, Jessop further revealed that they would be starting with Bitcoin [BTC] and Ether and that most of their initial set of customers were traditional investors.
In Novogratz opinion, custody was one of the biggest things that was holding institutional investors from entering the cryptocurrency space. When asked if Fidelity’s new cryptocurrency business would open the floodgates, he opined that any business requires providers of a good framework for investors to invest in, which includes indexes, exchanges and custody agents. He stated:
“when you get one of the blue chip names in the business that you know it makes it a lot easier if you’re sitting at the state or the city of pension plan to do that odd form and say yeah hey we trust this custom”
In terms of the security that institutional investors and others investors look for before entering the cryptocurrency space, Novogratz said that it can only be done with the “guidance” and trust. This, he stated, is because they don’t know if it is a commodity, a currency or an alternative. He further added:
“I see Bitcoin like gold almost as a currency, and I see the rest of web 3.0 more as a commodity, but you know, that’s one guy’s opinion. And so I think the institutional world is going to galvanize around how to see this as an asset.”
According to him, the change is coming “slow but surely”, giving an example of Yale University that recently invested in a cryptocurrency-based fund.
“just competitive world out there, they’re not going to be the only guys. I think they’re they’re getting out ahead of the pack, which is great. As you see more people in this space, you’ll start seeing the flow on, it’ll be a lot easier”
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