Fidelity Launches First Bitcoin Investment Fund for Accredited Investors

Fidelity Investments has announced the launch of its first Bitcoin investment fund, adding a top financial firm to its backing for the controversial digital asset.

The Boston-based Fidelity fund manager said in a filing with the U.S. Securities and Exchange Commission that it will begin offering the Wise Origin Bitcoin Index Fund through a new business unit called Fidelity Digital Funds. Peter Jubber, head of Fidelity Consulting, will head the new business unit, the filing showed .

The passively managed bitcoin investment fund will be available only to qualified purchasers through family offices, registered investment advisers and other institutions, a person familiar with the matter said. Fidelity Digital Assets will host the fund. The minimum investment is $100,000.

A Fidelity spokesman declined to comment on the news.

“This is a reflection of Fidelity’s long-term commitment to the future of blockchain technology and making digitally native assets like Bitcoin more accessible to investors,” the company said in an email.

Fidelity CEO Abigail Johnson is the most notable representative in the field of blockchain investment on Wall Street, as Fidelity has been a Bitcoin supporter since 2014. The CEO created Fidelity Digital Assets to provide special digital asset services suitable for hedge funds, family offices and trading companies.

The news of Fidelity’s foray into cryptocurrencies is welcome news for fans of bitcoin and blockchain who have long yearned for mainstream Wall Street acceptance. Banks have largely shied away from Fidelity’s business due to concerns about its regulatory involvement in digital currency money laundering and other illegal activities.

Despite signs that interest in crypto products may be increasing, other mainstream companies have made few forays into the crypto space. For example, Grayscale Investments LLC’s cryptocurrency trust attracted more than $900 million in the second quarter, nearly double the previous quarter’s high. The money came primarily from institutional investors, with total assets under management exceeding $4 billion.

During this period, the price of Bitcoin, the world's largest cryptocurrency, has recovered all losses since its global collapse in March amid the coronavirus-induced sell-off. Bitcoin has risen about 60% this year and is currently trading at around $11,500 - although it is still down about 40% from its all-time high in 2017.