On December 21, 2022, asset management firm Fidelity Investments filed three trademark applications to enable the company to enter the metaverse. On December 26, trademark attorney Mike Kondoudis announced that the company intends to offer cryptocurrency trading, non-fungible tokens (NFTs), NFT marketplaces, metaverse investment opportunities, and more as part of the Fidelity crypto investments product range. According to the trademark filings, the investment firm plans to integrate various crypto services that will enable customers to include crypto assets as part of their retirement and mutual funds. The Fidelity Investments crypto offering also includes plans for financial and educational services that operate inside the metaverse, including payments services, financial planning, and credit cards. Also, the company plans to introduce a crypto wallet as part of an ongoing initiative to promote crypto adoption among savers and investors.
In this article, we’ll dive deep into the Fidelity crypto investments products. We’ll discuss the various products and services in the pipeline and what customers can access already. Also, we’ll look at the pros and cons of including digital assets in your investment portfolio and some of the different options available for doing so. Additionally, we’ll explore why so many brands, celebrities, and businesses are jumping on the metaverse bandwagon and reaping the benefits of NFTs.
Please note that Moralis Academy does not offer financial advice of any kind. This content is intended for educational purposes only. Always conduct your own research before investing in cryptocurrencies or any other assets.
Fidelity Crypto Investments
Fidelity Investments is a multinational financial service provider based in the US and is the leading administrator of 401(k) investment plans. The company gives users access to a range of financial instruments and investment tools, including stocks and exchange-traded funds (ETFs). In November 2022, the firm announced plans to launch Fidelity Crypto accounts. Fidelity Crypto accounts give users access to cryptocurrencies via the Fidelity Investments app, making it easier than ever for retail investors to gain exposure to Bitcoin (BTC) and Ethereum (ETH) from a familiar trading environment. The early-access waiting list saw a significant portion of Fidelity customers sign up to become the first to access these crypto services. The initiative aims to promote crypto adoption among traditional investors while providing customers with more choices.
The submission of the December trademarks to the United States Patent Trademark Office (USPTO) will see the company expand its crypto offerings. These trademarks aim to lay the groundwork for Fidelity's foray into NFTs and the metaverse. Furthermore, Fidelity offers various exchange-traded funds (ETFs), including the Crypto Industry and Digital Payments ETF (FDIG) and the Metaverse ETF (FMET). These ETFs give investors exposure to the companies building the next generation of financial services and metaverse applications.
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The Fidelity Crypto account allows investors to gain exposure to the price of crypto assets from as little as a dollar. The service boasts commission-free trading. However, there is a maximum of 1% spread applied to all trades on the platform. Furthermore, the Fidelity Crypto investments account will initially be available to residents in 35 US states via the early-access waiting list.
So, does Fidelity offer crypto investments? Well, yes, it does. However, it provides a custodial service, meaning you don’t hold the private keys to your funds. Rather than being the sole custodian of your crypto assets, investing with a crypto custodian like Fidelity means trusting them with your assets' security. If the platform is compromised, your funds could be at risk.
Fidelity Investments Crypto Trademarks
The Fidelity Investments crypto trademark filings will see the company enter the metaverse with a suite of innovative products and services. Fidelity also plans to introduce educational services to bolster Web3 adoption among its customers. The December filings provide a glimpse into what we can expect from the forthcoming Fidelity crypto investments and metaverse offerings.
Despite the ongoing bear market and several calls from US senators for the Fidelity Investments crypto offerings to be reconsidered, the company is doubling down on its Web3 agenda. Although the specifics of the forthcoming products are unclear, the trademark filings suggest that Fidelity could offer financial management and planning services in virtual worlds.
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Why Does Fidelity Offer Crypto Investments?
So, why does Fidelity offer crypto investments? Fidelity is a leading 401(k) provider. The firm offers crypto investments to customers via their 401(k) retirement plans, allowing savers to allocate a portion of their portfolios to crypto in the same way they would to regular stocks and bonds. Fidelity removes many of the barriers to entry that prevent people from gaining exposure to crypto. However, using a non-custodial hardware wallet is usually the safest way to store your crypto. If you don’t hold your own private keys, you don’t have full control over your crypto. Nonetheless, understanding how to use crypto wallets can be challenging for some.
Crypto is a volatile asset class. Many traditional investors view the high risks associated with crypto as a healthy way to diversify their portfolios, and allocating a small amount of a portfolio to crypto is commonplace. However, some investors see the technical requirements of crypto investing as a bigger hurdle than volatility.
Gaining exposure to the price of crypto via a 401(k) plan allows investors to use crypto within their regular trading app without the technical challenges associated with using a crypto wallet. Moreover, Fidelity provides a custodial crypto investment service that lowers the barrier to entry for crypto investing. That said, if you want to secure your crypto assets, self-custody is usually a safer option.
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Does Fidelity Offer Crypto Investments for Everyone?
The Fidelity crypto offering gives existing customers an opportunity to invest in crypto from a familiar environment. However, the platform doesn’t cater to the broader crypto market. Anyone who’s already invested in crypto or understands how to use a crypto wallet is unlikely to make the switch. Firstly, the platform offers a limited range of crypto assets. Secondly, users can’t send or receive assets using their Fidelity Crypto accounts.
Compared to most crypto exchanges, the Fidelity trading experience may fall short of what many expect. Nonetheless, anyone who uses Fidelity Investments for their 401(k) plan and has little understanding of blockchain and crypto may enjoy the Fidelity Crypto account. Fidelity offers competitive trading fees with no deposit required for opening a Crypto account. Also, the platform makes it easy for customers to move assets between their regular Fidelity accounts and Fidelity Crypto accounts. However, if you’re not already a Fidelity customer, you’ll need to create an account and fund it before you can use the Fidelity Crypto account.
Another consideration is that Fidelity Crypto accounts are only available in 35 states. Though the company aims to increase this number, some US citizens won’t be eligible for Fidelity Crypto accounts. Additionally, that platform doesn’t process crypto transactions between 4 a.m. and 12 a.m. Eastern time.
In terms of functionality, the Fidelity Investments Crypto account is limited compared to most crypto exchange platforms and only offers very basic features. You can’t use it to interact with decentralized finance (DeFi) protocols, and it only allows you to trade a small number of assets within a small time frame. However, it provides a gateway to Web3 with a brand name that many US citizens already know and trust.
Why are NFTs and the Metaverse Becoming so Popular?
The Fidelity Investments Crypto accounts waiting list went live shortly before the company filed trademark applications for NFTs and the metaverse offerings. NFTs and the metaverse are among the biggest drivers of Web3 adoption. Several prominent NFT projects are endorsed by some of the biggest brands, businesses, and celebrities. Also, NFT projects like CryptoPunks and Bored Ape Yacht Club (BAYC) have reached mainstream media headlines globally after celebrity investors flocked to the NFT scene in recent months.
NFTs are unique representations of assets on the blockchain. They’re useful for tokenizing other assets on the blockchain and make it easy to trace and verify the scarcity and ownership history of things like art, collectibles, and in-game assets. NFTs play a crucial role in Web3 gaming applications. Also, brands and celebrities can use NFTs to create new audience engagement experiences and revenue streams. Plus, NFTs allow artists and creators to earn larger shares of the revenue they generate.
Furthermore, NFTs and the metaverse are becoming essential marketing tools sector-wide. The metaverse is a series of immersive, virtual, online experiences powered by blockchains and decentralized technologies. Although the metaverse is a relatively new concept, it is anticipated to become a multi-billion-dollar industry in the near future. Some of the biggest businesses and brands are entering the metaverse despite a bearish outlook in the crypto markets. Moreover, NFTs and the metaverse continue to drive Web3 adoption in the face of low investor confidence and high economic uncertainty.
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Fidelity Crypto Investments - Does Fidelity Offer Crypto Investments? - Summary
The December 2022 Fidelity Investments crypto trademark filings signal optimism toward cryptocurrencies among legacy financial institutions and their customers. Though these filings acknowledge the firm’s focus on NFTs and the metaverse, they follow the November announcements regarding the waiting list for Fidelity Investments Crypto accounts. The Fidelity Investments Crypto product gives customers exposure to crypto assets like Bitcoin (BTC) and Ethereum (ETH) via their 401(k) accounts. However, this looks to be the beginning of Fidelity’s foray into Web3.
By extending its services into crypto and the metaverse, Fidelity hopes to provide customers with a broader range of investment opportunities. Although this move highlights the growing popularity of crypto, NFTs, and the metaverse, lawmakers have spoken out against it, with many calling for tighter regulation to protect investors from the volatility of digital assets.
Some onlookers view the mainstream adoption of cryptocurrencies as a negative thing. For many, removing self-custody from the equation makes decentralized currencies redundant. On the other hand, many crypto enthusiasts view mainstream adoption as a necessary step for crypto to achieve its full potential. Moreover, some see crypto investment vehicles like the Fidelity crypto investments services as an opportunity for the worlds of traditional finance and crypto to come together in a compliant manner.
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