Fidelity Digital Currency Fund
2 min read
The Fidelity Digital Currency Fund offers institutional investors a way to invest in bitcoin and other cryptocurrencies, with cold storage custody and trade execution. The fund also offers dedicated support and market research. Through the fund, qualified institutional investors can buy and sell digital assets without moving funds. The fund’s minimum investment is $100,000.
The fund is not an actual cryptocurrency itself, but instead a digital asset exchange. It tracks daily performance of the bitcoin price through several price feeds. Investors can buy bitcoin through a reputable cryptocurrency exchange. The fund also invests in an exchange-traded fund (ETF) and a cryptocurrency lending company called BlockFi, which will allow institutional investors to use bitcoin as collateral for a cash loan. That way, they can get access to the capital without having to sell their bitcoin.
The fund invests at least 80% of its assets in the Fidelity Crypto Industry and Digital Payments IndexSM, a basket of global companies engaged in digital payment services, cryptocurrency and blockchain technology. This includes companies that develop and market digital currency, as well as those that produce hardware, software, and infrastructure.
The Fidelity Digital Currency Fund is available for Canadian investors, and offers a convenient way to invest in cryptocurrency. Authorized Participants can purchase and redeem shares at NAV, and do so in large increments called Creation Units. The fund does not place any restrictions on the number of Creation Units that can be purchased or redeemed by an Authorized Participant, but reserves the right to prevent disruptive trading.
A recent announcement from Fidelity, the nation’s largest provider of 401(k) plans, may put millions of Americans one step closer to investing directly in Bitcoin and other cryptocurrencies. The funds will still need to be approved by the U.S. Department of Labor, which oversees workplace retirement plans.
Fidelity plans to make bitcoin available to retirement plan participants in 401(k) and individual retirement plans. However, retail investors should not expect Fidelity to offer these services to individual investors. But the company does plan to include bitcoin in 401(k) plans by the end of May 2022.
As the fifth largest asset manager in the world, Fidelity Digital Assets has announced plans to launch an institutional cryptocurrency fund. The fund will offer institutional investors a secure and trusted environment to buy and sell digital currencies. The fund will be regulated and backed by a trusted custodian. The fund will also invest in blockchain research. The firm has partnered with MIT Media Labs and will study the technology’s scalability and the potential for innovation.
The fund may engage in transactions with affiliated financial institutions, including repurchase agreements with custodian banks and short-term obligations of the 50 largest banks in the United States. Additionally, the fund may engage in short-term currency transactions and short-term borrowings.
