Can I Buy Crypto on Fidelity?

If you are a Fidelity user, you probably, like many others, wonder – “can I buy crypto on Fidelity?” This investment company has launched Fidelity Digital Assets, a platform that allows trading and servicing investment in digital assets, in October 2018. Keep reading to find out what your possibilities are when it comes to trading with digital currency through one of the largest brokers in the country.     

So, can you buy crypto on Fidelity? You can’t buy crypto on Fidelity. Fidelity has requested to allow their clients limited exposure to crypto and the metaverse when it comes to exchange-traded funds, but this request was denied due to a lack of safety for the investors from the potential fraud.

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Nevertheless, Fidelity offers many features to their clients that allow them to invest in bitcoin and other cryptocurrencies indirectly through Coinbase. Find out all about the Fidelity platform.

Fidelity Investments Offers Mutual Funds Trading

Fidelity Investments is a company that has existed since 1946, and it is the largest asset manager in the world. It operates a brokerage firm, a vast number of family mutual funds, while it also provides fund distribution, retirement services, and many more.

Mutual funds are investment strategies that allow many investors to trade together with a collection of bonds, stocks, or other securities that are usually hard to invest alone. Once you invest in mutual funds, you become an owner of the fund’s shares. So in a mutual fund, you don’t own securities but fund’s shares. Most mutual funds own over 100 securities, which means by investing in a mutual fund you will be investing in all those securities. This will expand your portfolio and you will have diverse investments. Here is where you can invest in Fidelity:

  • Stocks,
  • Bonds,
  • Mutual funds,
  • ETFs,
  • Fractional shares.

Exchange-Traded Funds or ETFs Explained

What is an ETF? Exchange-traded funds or ETFs are a collection of securities and shares that can be traded, exchanged on the stock market like an individual stock. At Fidelity Investments, you will get Commission-free ETFs plus iShares, tools, and more. The great thing about ETFs is that you have intraday liquidity, lower costs, transparency, and great flexibility. Here are the main differences between ETFs and mutual funds:

ETFMutual funds
Buying and sellingBuying and selling is done daily through the exchange.Buying and selling are done directly through brokerage firms or mutual funds.
Minimal investmentMinimum investment is based on the share.Minimum investment depends on the funds.
PricingPricing is done individually like stock until the market is closed.Pricing is done daily.
Internal cash positionThere is no cash needed.Most mutual funds will maintain some cash for potential investor redemptions.

Can I Buy Crypto on Fidelity?

Fidelity Investment has filed a request at the Securities Exchange Commission or SEC to get permission to create exchange-traded funds with exposure to crypto and the metaverse. This request was declined. Just a portion of institutional investors are able to exchange bitcoin through Fidelity Digital Assets.

Fidelity Digital Assets is a company launched by Fidelity investments in 2018, and this company provides options for institutional investors to use digital currency. They provide trade and cold storage custody. Institutional investors are able to use Fidelity Digital Assets to buy or sell digital assets without transferring capital from their accounts.

Is There a Fidelity Physical Bitcoin ETP?

The answer to this question is yes. Fidelity International, a company that was part of Fidelity Investments until 1980, has launched Fidelity Physical Bitcoin ETP (exchange-traded product) the Fidelity Physical Bitcoin ETP is available to institutional clients in Europe, and what this product does is to track bitcoin in Europe. Fidelity Digital Assets service acts as custody to the Fidelity Physical Bitcoin ETP. A Fidelity Investments Canadian subsidiary has also launched an ETF that invests directly into bitcoin.

While in the US, SEC has denied giving permission for Fidelity Physical Bitcoin ETP, and Fidelity Investments’ Wise Origin Bitcoin Trust was also denied. So currently, in the US, there is no Fidelity Physical Bitcoin ETP, but the company will not give up on trying to satisfy the increasing demand of their investors to be exposed to cryptocurrencies. 

Does This Broker Provide Retail Investors With Any Bitcoin Services?

Currently, the answer to this question is no. Even though the Fidelity Digital Asset survey shows that 90% of investors interested in digital assets wish to be exposed to cryptocurrencies, the broker company is unable to provide them with a solution at the moment. Instead, you can invest in cryptocurrencies and bitcoin indirectly. Investors can not buy or venture into trading cryptocurrency on Fidelity, but you can track your coin if it was both through Coinbase. Also, all investors can use bitcoin and other cryptocurrencies to make donations to Fidelity Charitable, a charity that was founded in 1991.

Stock market on laptop

How Did Fidelity Physical Bitcoin ETP Perform on Market?

With $4.2 trillion of AUM (Assets under management), Fidelity Investments is the largest asset manager in the US. And even though it offers professional investors access to cryptocurrencies through Grayscale Bitcoin Trust, still this offer is limited to investors with high minimums of $250,000 per investor. SEC has refused to allow Fidelity low fee and costs Bitcoin ETF.

On the other hand, ever since Fidelity in Canada has launched the Bitcoin ETF, the Canadian crypto ETF market is becoming increasingly crowded. Many large institutional investors like hedge and private equity funds took this advantage and invested their money in cryptocurrency in Canada. So, in essence, Fidelity Physical Bitcoin ETP has proven to be an excellent investment opportunity for many investors.