Should You Try Fidelity's New Crypto Platform?

for retail investors. Last November, the brokerage firm launched a wait list for those interested in services including custody and zero commission trading for bitcoin and ether. Fidelity Investments is one of the largest investment managers in the industry and is one of the first financial services firms to offer

crypto trading to clients. Those who do want to dip their toes in the digital assets market had in the past used changes like f t X or coin base, but in the wake of the ft X collapse, news of fidelities digital access platform could just provide the crypto

curious investor with an alternative opportunity. So what does fidelities new retail crypto trading platform and potentially any others like it mean for the industry and how might it shape the way retail investors interact with the digital assets market. My colleague, Claire Balantine is a Bloomberg reporter who covers personal finance, and she joins us. Now, I think for so long people think of it as separate. People think of crypto as not something you do in your Vanguard

account or something. They think of it as like this totally separate entity. Okay, Claire, So maybe we can just start out with an introduction from you. Tell us a bit about what you cover a bloomberk. So I cover personal finance here, uh, and wealth trends basically is anything

involving people and their money, particularly retail traders. Everyday people how they're trading, how they're investing, what they're investing in, um trends, and how they live their lives and think about work and their fun activities and how they handle their money. And possibly we could say that they haven't really been having so many fun activities when it comes

to crypto, at least recently. Right, So, I wanted to ask you to give us a sentiment check on because you speak with so many people on a daily basis, what the mood music is like out there right now. When it comes to retail investors and crypto specifically and

what they're feeling. What I think is really notable about this point in time is, you know, for so long I would talk to retail traders who are interested in crypto or who at least dipped their toes into crypto, and they were so optimistic about it, or they were so passionate and strong believers, And I think that's really been chipped away at throughout this whole f d X crisis.

Definitely still have people that are you know, holding on, that are very hottling, that are hottling, that are very into crypto still, but it was the first time that I really saw that start to crack and people really wondering, you know, what am I doing with my money in these investments? Is this actually a good idea long term? How has that changed? You're talking about post f t X specifically, right, So that was the big breaking point. It sounds like for a lot of people, Oh absolutely.

I think for a lot of people they thought fd X was the safe one. People also said that about about Voyager, about Celsius, and their confidence was chipped away at over the past year, and then when fd X happened, it was a big breaking point for a lot of people, especially those that have their money locked up. I mean that's something that's hard to move on from. Yeah, so what are retail investors doing right now? Are they totally staying away from crypto? Are they trading still? Are they

still into coins, are they still into projects? Or have they been sort of broadly speaking, scared away from the space. I think a lot have been scared away. I think a lot of taken a step back, especially during the holidays. People have things going on. But I wouldn't say they're abandoning it completely in terms of sentiment. I think that people still want to trade, they want to be involved in markets. You know, it was it was fun for them and was largely successful for a long time, and

they're not going to give that up completely. I think they've been shaken a bit. I do think that after FDx, there has been a move towards people investing more in things like bitcoin and ether and sticking with those well known names that they have a bit more faith in,

rather than you know, random projects. I do think there's also been a big, big move to words people not having faith and online platforms moving their coins into cold storage for some figuring out how that works for the first time because they've only known trading on platforms like

ft x and coin base. So especially the ones that are sticking with crypto, that are really invested in it, you know, not your keys, not your coins, has been the big refrain, and they're taking their assets off these online exchanges unless they've had their assets stuck ft X,

for example. So can you just describe, let's say I had money that I put that I was trading on f t X, what happens to that money now that ft X is in bankruptcy and things have sort of been locked up, and then maybe tell us a bit more about my ability to get that money back. Yeah. So what we saw initially in the first few weeks of this happening, you know, we saw f t x, and then we saw things happening with Block five and

with Gemini, it was really sporadic. Some people I was talking with were getting their money back, getting part of their money back. You know, there was still kind of some hope, I think right now, especially after you know, weeks even months have gone by, If people can't access their money, they're losing hope in a lot of ways. In terms of getting it back, still a possibility, but

it gets complicated. These bankruptcy proceedings are happening, They're going to take months, maybe even years, and in the course of all of this, regular customers that have put in, you know, some of their savings are going to be the last to be paid back. So we saw this happen, and that's that's just based on how bankruptcy proceedings work in general, right exactly where others above the retail customers tend to get their money back first. Yes, the bigger

creditors are first in line. You know, it all depends on how the bankruptcy structured and whatnot. But you know, the person with two thousand dollars in their account, well a lot of money to them, isn't very much in the grand scheme of, you know, a company in their bankruptcy. It was interesting in seeing Voyager play out earlier because it was sort of a case study for f t

X and for what's happening the same with Celsius. At least at first, f t X, you know, bought Voyagers assets, so there was some hope that they could bail them out then that was up in the air, and now with f t X, you know what happens with the assets they have left and with the customers money. Really is just very up in the air and people are waiting to sort of see that play out. But I think a lot are losing hope. Can you maybe talk about the trust that people put into some of these names.

So we mentioned already that f t X had before the bankruptcy and before everything fell apart, a very good standing in the crypto industry and a very good reputation for sort of being a solid place to beach reading.

So talk about what sort of trust people had had in these types of places and how that has wrote it obviously, because it's very hard harrowing to to read stories about you know, families and and a son telling his dad to put his x percentage of his life savings into some of these platforms or to you know, to be yield farming on some of these platforms, and then two now us be writing about how that money

is not likely to be coming back anytime soon. Yeah, I think it's hard to overstay just how much trust people had in these I think if you think about the crypto industry at large, especially you know, at its peak and when there was all this fervor around it. There are so many small little projects happening that we're popping up, you know, all the meme coins and things like that, and it's sort of all about the comparison.

So compared to that kind of thing, you know, you think of a platform like FTX, especially with this sort of famous founder behind it, who a lot of people thought was this prodigy, and especially when you compare that to n f t s and dows and little coins that some people really really believed in, but a lot coins doggy coins, and in comparison to them, you know, platform like f TX, like Voyager, seemed very stable. I think it's all about the comparison in a lot of ways.

But I think you're so right. People talk this up to their families. They said this is a way to make money, and for so long everything was going up in every way, and so it wasn't even incorrect in their predictions in a lot of ways. You know, as long as they got out in time, even with the stock market, you put money in, it was going up.

That was the narrative, and it was the truth years exactly so then you know, when this collapse happened, it was hard for a lot of people to believe, especially if if this is they're one and only experience with investing, and they're so into the ecosystem and the Twitter community and the rabbit community and all their friends and people are talking up crypto. It was really a shock. I

think when things collapsed. The reason I ask is because I think the majority of people would fall into this category,

but then there's a small sliver of people. And you had this great story about this a couple of weeks ago post f t X, where you interviewed people who basically said, well, I knew there was huge risk involved, and I knew there was a possibility that I could lose my money, so I'm just going to move on with my life, right And I think, you know, I talked to financial advisors in addition to regular people, and unfortunately that is all as the advice that they give

to people. If you had money in f t X, while there is a possibility you could get it back, in terms of planning your finances, moving on with your life considering that money gone is the smartest way to move forward in terms of planning your finances, which is really unfortunate. But I think there's so much interesting psychology

that goes along with all of this. But in terms of moving on, sort of grieving this loss and then thinking forward about what you're going to do with your money moving forward is something that that some people really are doing and that I think a lot of financial

advisors really endorse and encourage people to do. And although we do have a lot of retail investors staying away, a lot of institutions stay staying away, there's actually at least one company that's sort of making headlines for going further into crypto, and that's Fidelity, And I'm hoping you can lay out for us what exactly they're doing, because they have a ton of crypto offerings and they've been involved in some way with the crypto space for a

number of years. So last November Burgrage firm, Fidelity launched a wait list for those interested in crypto trading services, planning to offer custody and zero commission trading for bitcoin and ether. Fidelity is one of the largest investment managers, so they have this name brand that they can really draw on, and they're doing a lot of marketing to promote this up next more with Bloomberg reporter Claire Balentine on the latest in retail crypto trading. We'll be right back.

I get a lot of emails from Fidelity. I have a four one K account with Fidelity Disclosure, but I get a lot of emails from them basically saying things like five tips for how to manage x y z money or account or how to trade x y z. So is this something that they're doing when it comes to crypto as well. Definitely. Yeah, they are really promoting this, I think among their long time customers and offering the

chance to be you know, the first into this. Talk about kind of bad timing in a way with starting this last November, but they are continuing to roll it out. Um, there's no official start date yet, but it does seem like now, especially as we've seen bitcoin rally recently, they're moving ahead with this and you know, going to provide this opportunity for interested investors. It's possibly the worst timing

in the universe. And they also had at one point last year rolled out a four one K option right right, And I think that is appealing to a lot of people in a lot of ways. But then you see it happened with FDx that caused a major blow to all the confidence. But you know, moving forward, I think it's something that people do want the ten to do. So it's you know, we'll see how much interest there is in this Fidelity offering, but it's something that definitely

can find an audience. It's so fascinating to see people pushing forward into the space, and you know, you you have to at a certain point. You know, maybe not the most ideal timing, but yeah, they are. They're moving forward with their crypto offerings, and to be fair, you know, it's a platform like Fidelity does sort of give a lot of legitimacy to crypto trading because they are kind

of this trusted investment manager. So they're still providing investors an opportunity, which you know makes sense in a lot of ways, because I don't think anyone's saying crypto is going away. This is a major major setback, but especially for Bitcoin, for the well known coins, you know, people are still optimistic about it in a lot of ways.

So yeah, this has the potential to really entice some retail invest Sutter's back into the market and something that they trust more I think that's going to be the key thing moving forward in both crypto industry and the more traditional investment management industry. It's trust and providing investors with a sense of confidence and security in their trading. And it's going to be an uphill battle, I think.

But you know, a firm like Fidelity that already has this sort of trust built in isn't a good position to move forward. And just as a side note, we did reach out to Fidelity. We were hoping to talk to them about these crypto offerings, and they told us that they're not yet ready to be talking about their

crypto offerings at least for another couple of months. When you are talking to everyday investors, is this something they're telling you they would like to be seeing from their brokerage accounts where they're you know, offering up these new crypto trading options or for one K options. Is that something people actually want? That's a great question. I think for so long, people think of it as separate. People think of crypto as not something you do in your

Vanguard account or something. They think of it as like this totally separate entity. I do think that people want a way to invest in crypto for their retirement. I have heard that whether or not that's a little bit or a lot varies, but I think people want options. People want the ability to do what they believe in, especially for tax deferred accounts, is really appealing to them. So I think there definitely is a market for this.

I don't think anyone is saying put all of your four one K and crypto, but to have this opportunity, I think is something investors do want to at least have the option. Claire, I heard you have of your four one K and cryptocurrencies, all of it. My one time, I made the terrible mist ache of looking up my target retirement date with crypto, with crypto, with my crypto, with my career, and there's nothing that's more discouraging than realizing that you have to work another forty years before

you get four hundred years. Four hundred years if you invest in crypto. Maybe thanks so much for joining us. Things that was Bloomberg reporter Claire Valentine. You can find more of her work on the Bloomberg terminal and on Bloomberg dot com. For more, be sure to check out our twice weekly newsletter, Bloomberg Crypto We'll see you next time. This is Bloomberg Crypto, a daily podcast from Bloomberg and

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