Abigail Johnson saw some winters in her time.
Johnson, CEO of Fidelity Investments, shared his thoughts on the cryptocurrency market during a discussion at the 2022 Consensus in Austin, Texas.
“I think this is my third cryptocurrency winter. There have been a lot of ups and downs, but I see it as an opportunity,” Johnson said of the bear market, according to Coindesk, which produced the event.
“Bend and go harder”
“I was educated to be an opposing thinker, so I have this knee-jerk reaction: if you think the foundations of a long-term case are really strong, when everyone else is falling apart. [out]that is the time to double down and work harder, “he said.
Johnson acknowledged the recent drop in the price of cryptocurrency, saying, “I feel horrible about the value being lost, but I also think the cryptocurrency industry has a lot more to come.”
Goldman Sachs analysts recently said the global market for major cryptocurrencies has lost $ 1 billion in value this year.
In April, Fidelity Investments said it would allow investors to put a bitcoin account in its 401 (k) s. Boston-based investment brokerage became involved with bitcoin in 2014.
“A seat at the table”
“He really wanted to do mining because he wanted us to understand the whole ecosystem, he wanted us to have a seat at the table with people who were actually running things, and we wanted to understand the whole pile,” Johnson said.
The company said Fidelity’s workplace digital asset account is the industry’s first offering that will allow people to allocate a portion of their retirement savings to bitcoin through its 401 (k) investment line. ).
There have been some concerns about Fidelity’s digital asset account.
Ali Khawar, the acting undersecretary of the Employee Benefits Security Administration, said Wall Street Journal in April, that the department has “serious concerns” over Fidelity’s decision to include the option to invest in bitcoins within its 401 (k) savings program.
In addition, Massachusetts Sen. Elizabeth Warren and Minnesota Sen. Tina Smith wrote to Johnson expressing concern about the plan and noting that the U.S. Department of Labor. its investment menu due to the high levels of risk posed by digital assets.
“Beating the cryptographic drum”
Earlier this month, ForUsAll Inc., a 401 (k) provider, sued the Department of Labor, alleging that regulators breached its legal scope by threatening a “research program” aimed at plan sponsors offering digital assets to through its main or self-directed programming. brokerage accounts.
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Fidelity had $ 2.4 trillion in 401 (k) assets by 2020, or more than a third of the market, according to research firm Cerulli Associates.
Frank Corva, a senior crypto and blockchain analyst at Finder, said Johnson’s comments on the duplication are “certainly significant and nothing new either.”
“Johnson has been hitting the cryptographic drum for years,” he said. “And beyond Johnson’s rhetoric, Johnson has helped Fidelity pave the way for traditional financial institutions and retail investors to enter the digital asset space for years.”
“Over the past eight years,” he said, “loyalty has paved a path that only other traditional financial institutions have recently begun to follow.”
In 2019, the company obtained the hard-to-acquire BitLicense from New York State, he said, a commercial license for virtual currency activities, issued by the New York State Department of Financial Services.
Fidelity has been well ahead of the curve compared to other large traditional financial firms, Corva said.
“Johnson and his team know not only how to buy the fall and hold on with long-term conviction, but they know how to build when the cryptocurrency market falls, as they did in 2018-2019,” he added..
Establishment of the standard
Corva said it’s hard to imagine people like JPMorgan Chase CEO Jamie Dimon and other senior banking executives not paying attention to Johnson’s rhetoric and Fidelity’s actions.
“I imagine what Johnson and Fidelity did in the cryptographic space was one of the factors that got Dimon closer to Bitcoin,” he said. “The more Johnson sets the standard for what a traditional financial institution like Fidelity can do to bring its customers, both retail and institutional, into the digital asset space, the more the cryptographic industry will benefit.”
In February, BNY Mellon Bank, which specializes in storing assets for corporate clients, said it would keep cryptocurrencies for the first time. Fidelity began offering its bitcoin storage services in March 2019.
Separately, Citadel Securities and Virtu Financial are building a cryptocurrency trading platform with the help of Fidelity and Charles Schwab. (SCHW) – Get the report from Charles Schwab Corporation (The)..
The cryptographic product is still in its early stages of development, Bloomberg reported, citing people familiar with the matter, adding that it could be available later this year or early next year.