Sebastian Sinclair

In an effort to navigate the increasingly complex regulatory landscape of the digital asset market, EY announced Monday the rollout of the fourth generation of its EY blockchain analytics tool.&nbsp;



Fidelity Digital Assets, a branch of Fidelity Investments, has become the first enterprise client to leverage the tech, available via EY Blockchain&#8217;s Software as a service platform.



The web-based analytics tool, used by the company’s audit team since 2018, is designed to assist organizations in internal risk management by offering third-party on-chain data queries and wallet address derivations.



Reconciler currently supports a range of blockchains, including <a href="https://blockworks.co/tag/bitcoin">Bitcoin</a>, <a href="https://blockworks.co/tag/litecoin">Litecoin</a>, Bitcoin Cash, <a href="https://blockworks.co/tag/ethereum">Ethereum</a>, and Ethereum Classic. Additionally, it provides support for various ERC-20 tokens such as BAT, DAI, MKR, KNC, ZRX, LINK, CV, and MANA.



EY is positioning the move as an advancement in risk management for digital asset platforms and comes amid a <a href="https://blockworks.co/news/compliance-key-for-exchanges">backdrop of increasing regulatory scrutiny</a> and <a href="https://blockworks.co/news/crypto-skeptics-were-right">skepticism about the security and transparency</a> of the crypto industry.



Read more: <a href="https://blockworks.co/news/privacy-public-transparency-dex">Privacy and public transparency: Can a DEX provide both?</a>



EY’s suit of blockchain tools, which has gone through various iterations over its six-year history, plans to add further support for additional blockchains “based on client demand.”&nbsp;



Support for <a href="https://support.blockchain.com/hc/en-us/articles/9012572718108-What-is-xPub-and-how-do-I-get-it-#:~:text=An%20xPub%20(Extended%20Public%20Key,addresses%20without%20sharing%20private%20keys.">xpub</a> address derivation, block explorers and staking analytics will also be made available sometime in the future, EY said.



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EY’s blockchain tool courts Fidelity amid crypto market skepticism

James Cirrone

In laying out the bull case for ether on Wednesday, Fidelity’s digital assets subsidiary said dapps built on Ethereum are “capable of things that could not be done on Bitcoin’s network due to Ethereum’s superior programmability.”



Researchers who compiled the <a href="https://www.fidelitydigitalassets.com/research-and-insights/ethereum-investment-thesis">report</a> said investors could view ether (<a href="https://blockworks.co/price/eth">ETH</a>) as an “aspiring” form of money.&nbsp;



Ether, they wrote, will “likely face significantly more headwinds than bitcoin to become widely accepted as a form of money.”



Why? Unlike bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>), which has a hard cap of 21 million, ether technically has “unlimited supply parameters” — even though there is a fee burning mechanism. It was <a href="https://blockworks.co/news/ethereum-deflationary-2-months">introduced by upgrade EIP-1559</a> in August 2021 and has led to deflationary periods for ether.&nbsp;



There’s uncertainty relating to future upgrades to Ethereum and the number of the tokens in circulation on an untethered schedule, according to the report. And the cumulative effect has been that ether’s supply has a slew of obstacles before it can be “reliably consistent to that of other store of value assets.”



“It seems unlikely that any other digital asset could improve upon bitcoin as a monetary good because bitcoin is viewed by some as the most secure, decentralized, sound digital money to this point, and any “improvement” would require tradeoffs,” the report said.



Fidelity acknowledged that Ethereum’s use of <a href="https://blockworks.co/tag/smart-contracts">smart contracts</a>, which unlocks a whole new layer of programmability, is ether’s “true differentiating factor.”



The other thesis Fidelity discussed behind ether’s value was its potential to generate yield through staking.&nbsp;



The act of staking ether on the network has changed dramatically since <a href="https://blockworks.co/news/ethereum-shapella-ok-despite-bug">the Shapella upgrade in April 2023</a>.



Fidelity said the payout structure for validators attesting to the blocks of each epoch and for block proposals proffer incentives to stake the maximum of 32 ETH. The base reward is proportional to validators’ effective balance.&nbsp;



The report also pointed out that base reward is inversely proportional to the number of validators.



“The rationale for this issuance formula is to ensure enough validator participation because higher yields are paid if the validator set is small, while also guaranteeing that unexpectedly high issuance will not occur if many validators participate,” the report said.



This balance, <a href="https://blockworks.co/tag/fidelity">Fidelity</a> argued, has allowed Ethereum to sustain yield payouts. Plus, there are forms of yield paid out by users including MEV and tips, which supplement the network’s payout burden. 



Fidelity’s ultimate conclusion was that increased activity on <a href="https://blockworks.co/tag/ethereum">Ethereum</a> does in fact drive block space demand, which in turn, generates cash flow for token holders. 



But, the report said there remain “complex, nuanced” factors, including protocol and scaling upgrades, that make Ethereum’s future uncertain for investors.



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Fidelity: How ‘does utility translate into value for ether the token?’

Ben Strack

<div id="highlights-block_6320afdda7b47" class="highlights">
 <ul>
 <li>Former Citadel Securities business development head leads EDX Markets as its CEO</li>
 <li>The exchange’s general counsel formerly worked in the same role at Fidelity Investments’ digital assets arm</li>
 </ul>
 
</div>



A new crypto exchange has gained the support of a swath of broker-dealers, market makers and venture capital firms as executives from the companies comprise the young company’s leadership.



Charles Schwab, Citadel Securities, Fidelity Digital Assets, Paradigm, Sequoia Capital and Virtu Financial are among the backers for the new company, called EDX Markets. The exchange is set to go live in early 2023, according to a spokesperson.



<a href="https://www.linkedin.com/in/jamil-nazarali-2016044/" target="_blank" rel="noreferrer noopener">Jamil Nazarali</a>, the former global head of business development at Citadel Securities, joined EDX Markets as its CEO in July. <a href="https://www.linkedin.com/in/tony-acu%C3%B1a-rohter-a357879/" target="_blank" rel="noreferrer noopener">Tony Acuña-Rohter</a>, previously a chief technology officer at ErisX, now works in the same role for the new exchange. <a href="https://www.linkedin.com/in/david-a-forman-51726355/" target="_blank" rel="noreferrer noopener">David Forman</a>, a former chief legal officer at Fidelity Brokerage Services and general counsel for Fidelity Digital Assets, is EDX Market’s general counsel.&nbsp;



Representatives from the founding member firms comprise EDXM’s board of directors.



“Crypto is a $1 trillion global asset class with over 300 million participants and pent-up demand from millions more,” the company’s board said in a statement. “Unlocking this demand requires a platform that can meet the needs of both retail traders and institutional investors with high compliance and security standards.”



The exchange seeks to aggregate liquidity from multiple market makers to reduce spreads, improve transparency and lower investor costs, a company spokesperson told Blockworks. MEMX will provide the technology infrastructure for EDX Markets.



The participation from companies such as Charles Schwab and Fidelity Digital Assets in launching the exchange marks a continued interest in crypto from the financial services titans.&nbsp;



The latter company’s parent company moved to allow certain US workers to <a href="https://cms.blockworks.co/fidelity-delves-deeper-into-crypto-by-allowing-bitcoin-in-401ks/" target="_blank" rel="noreferrer noopener">allocate a portion of their retirement savings to bitcoin</a> through the company’s 401(k) plan investment lineup. Fidelity Investments is also <a href="https://cms.blockworks.co/fidelity-mulls-bitcoin-trading-on-all-brokerage-accounts/" target="_blank" rel="noreferrer noopener">reportedly mulling</a> how to allow retail customers to trade bitcoin on its brokerage platform, according to the Wall Street Journal.



<a href="https://cms.blockworks.co/first-charles-schwab-crypto-etf-set-to-launch-next-week/" target="_blank" rel="noreferrer noopener">Charles Schwab launched its first crypto-related ETF</a> last month. The fund’s top holdings include Marathon Digital, Riot Blockchain, MicroStrategy and Coinbase.&nbsp;



Other traditional finance players have also jumped deeper into the space in recent months, despite the so-called crypto winter.&nbsp;



BlackRock, the world’s largest asset manager with roughly $8.5 trillion, <a href="https://cms.blockworks.co/industry-watchers-execs-weigh-significance-of-blackrock-coinbase-deal/" target="_blank" rel="noreferrer noopener">partnered with Coinbase</a> last month and days later <a href="https://cms.blockworks.co/blackrock-launches-spot-bitcoin-private-trust/" target="_blank" rel="noreferrer noopener">launched a bitcoin private trust</a>. More recently, <a href="https://cms.blockworks.co/franklin-templeton-preps-first-institutional-crypto-accounts/" target="_blank" rel="noreferrer noopener">Franklin Templeton revealed its intention last week</a> to offer its first crypto-focused separately managed accounts (SMAs) to investment professionals.



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Finance Giants Join Forces To Launch Crypto Exchange

<div id="highlights-block_629638d78464e" class="highlights">
 <ul>
 <li>Hiring spree to help the business expand its support for assets other than bitcoin, such as ether</li>
 <li>Planned growth follows Fidelity revealing that it would allow individuals to allocate a portion of their retirement savings to bitcoin</li>
 </ul>
 
</div>



Fidelity Investments’ digital asset arm is seeking to double its headcount by the end of the year amid its push to expand its support for assets other than bitcoin.



The company, which currently employs more than 200 people, is seeking to add 210 workers to its force, a Fidelity spokesperson told Blockworks. This includes about 100 client service roles, 50 custody operations jobs and about 30 roles each in execution services and technology building.



The pending hiring spree will help the business expand its support for assets other than bitcoin, such as ether, as well as 24/7 trading, customer service and cloud migration, a representative said. It will also allow the company to better provide services to clients, such as new compliance and tax reporting tools, as the business grows.&nbsp;



Founded in 2018, Fidelity Digital Assets is a subsidiary of Fidelity Investments, which had assets under administration of $11.3 trillion, as of March 31. It has a digital asset custody and trading platform designed for institutions and an asset management business offering crypto investment products.



Some of the upcoming hires will fall under the leadership of Peter Jubber and Chris Tyrer, who have recently transitioned to new roles.



The company revealed internally last week that Jubber, formerly the head of its distinct digital asset management business, now leads enterprise engagement for Fidelity Digital Assets. He will focus on boosting education for associates as the firm seeks to develop a “holistic” digital assets offering.



Tyrer, who has led Fidelity’s international business, now also oversees the digital asset management offering within Fidelity Digital Assets.



“These shifts won’t have any impact on Fidelity Digital Assets’ clients but were made to align with the needs of the business as it continues to grow,” a Fidelity spokesperson said.



Fidelity has made headlines for its crypto initiatives in recent months. In addition to <a href="https://cms.blockworks.co/fidelity-launches-metaverse-experience-in-tandem-with-new-etfs/" target="_blank" rel="noreferrer noopener">debuting</a> a metaverse experience and two crypto-related ETFs, the company <a href="https://cms.blockworks.co/fidelity-delves-deeper-into-crypto-by-allowing-bitcoin-in-401ks/" target="_blank" rel="noreferrer noopener">announced last month</a> that it would allow individuals to allocate a portion of their retirement savings to bitcoin through its 401(k) platform.



Sen. Elizabeth Warren, D-Mass., and Sen. Tina Smith, D-Minn., wrote a letter to Fidelity CEO Abigail Johnson, calling crypt investments “a risky and speculative gamble.”&nbsp;



Fidelity privately responded to the senators by their recommended deadline of May 18 to address some of their concerns, a spokesperson told Blockworks.



“The [Digital Asset Account] offering features several institutional consumer safeguards including but not limited to, excessive trading oversight, investing limits, transparency, market-leading education, and cyber-security features,” the representative said. “Fidelity looks forward to continuing the dialogue on this exciting offering with federal regulators and policymakers consistent with our approach to many new services we offer our customers.”



Fidelity Digital Assets’ efforts to double the company’s headcount come after Tom Jessop, president of Fidelity Digital Assets, said in an interview with Bloomberg last July that the company <a href="https://cms.blockworks.co/fidelitys-digital-assets-division-reportedly-plans-to-boost-staff/" target="_blank" rel="noreferrer noopener">was hoping to add 100 people</a> specializing in technology and operations. 



Jessop noted at the time that the company wants to “be ahead of [ether] demand,” and allow crypto trades throughout more of the week.



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Fidelity Digital Assets To Double Headcount by End of Year

Michael Bodley

<div id="highlights-block_61e5a54946010" class="highlights">
 <ul>
 <li>Dual Worlds’ flagship vehicle plans to invest in both digital assets-focused hedge and venture funds</li>
 <li>The fund will focus on decentralized finance, non-fungible tokens, the metaverse, Web 3.0 and play-to-earn gaming</li>
 </ul>
 
</div>



A former Fidelity Digital Funds executive is launching a crypto fund of funds that would back both venture and hedge funds focused on digital assets, according to three people familiar with the matter.



Michael Zinaman plans to hold a first close on capital for the flagship vehicle of his new Dual Worlds firm in February, sources said. A second close would occur sometime later in the year, with the goal being to raise $50 to $100 million overall.&nbsp;



Sources were granted anonymity to discuss sensitive business dealings. Zinaman declined to comment.&nbsp;



The flagship vehicle, Dual Worlds Fund 1, plans to invest in crypto portfolio managers worldwide — ranging from new launches to established funds. It will write both limited-partnership checks and invest in general-partnership stakes or seeding deals from time to time.



Zinaman also plans to make direct equity investments, usually as a co-investment alongside a partner fund.



<h3 class="wp-block-heading">Fund of funds landscape</h3>



The number of newcomer crypto portfolio managers from top-tier investment backgrounds has increased exponentially in the last year, industry participants say. This, in turn, has led to a <a href="https://cms.blockworks.co/fidelity-most-institutional-investors-open-to-crypto-want-an-etf/" target="_blank" rel="noreferrer noopener">boom</a> in the fund of funds market as more opportunities have arisen to get in on the ground floor of a new crop of digital asset investors. 



<blockquote class="wp-block-quote">“The fund of funds landscape is really interesting, right, because you have an emergence of crypto funds,” one source familiar with Dual Worlds said. “There’s a lot of them getting started, and they&#8217;re starting to really specialize. You&#8217;re starting to see funds that only do [decentralized finance], funds that only do gaming — you can go down the list.”</blockquote>



Indeed, Dual Worlds plans to focus on strategies specializing in what Zinaman views as the next frontiers of crypto: DeFi, non-fungible tokens, the metaverse, Web 3.0 and play-to-earn gaming.&nbsp;



Joining Zinaman at Dual Worlds are Chris Ott of family office Falcon Capital and Trevor Cohen of Nebari, an investment firm focused on natural resources.&nbsp;



Ott, a founding member and principal of Naples, Fla.-based Falcon, which runs a proprietary trading desk, is a general partner at Dual Worlds. Cohen, a hedge fund veteran and Nebari’s chief financial officer, holds the title of chief operating officer for Dual Worlds and also oversees financial functions.



Dual Worlds counts Matt Walsh, partner at the crypto venture capital firm <a href="https://cms.blockworks.co/fidelity-veterans-go-full-time-crypto-at-the-right-time/" target="_blank" rel="noreferrer noopener">Castle Island Ventures</a>, as a strategic advisor — one of several high-profile advisors to the firm. Walsh declined to comment on Dual Worlds when contacted by Blockworks.



Zinaman also has a number of venture partners whose performance is taken into account when it comes to Dual Worlds’ marketing efforts.



Before working at Fidelity Digital Funds — the crypto asset-management arm of Fidelity, Zinaman spent time as a managing director focused on blockchain and digital assets for Canaccord Genuity. 



He previously spent about a decade in institutional fixed-income sales, specializing in emerging markets.  



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Sources: Fidelity Vet Launching Crypto Fund of Funds

Casey Wagner

<div id="highlights-block_61e1edc18dd2c" class="highlights">
 <ul>
 <li>Rio de Janeiro Mayor Eduardo Paes said the Brazilian city will put 1% of its treasury into crypto</li>
 <li>The announcement is in line with Fidelity Digital Asset researchers’ predictions </li>
 </ul>
 
</div>



Brazil’s second-largest city is allocating 1% of its treasury to cryptocurrencies, Rio de Janeiro mayor Eduardo Paes said Friday. 



The announcement confirms a 2022 prediction from Fidelity Digital Asset researchers: that more governments and central banks will acquire digital assets. It comes down to keeping up appearances and staying on top of new innovations, they said.&nbsp;



“We also think there is very high stakes game theory at play here, whereby if bitcoin adoption increases, the countries that secure some bitcoin today will be better off competitively than their peers,” Fidelity Digital Asset researchers wrote in a <a href="https://www.fidelitydigitalassets.com/articles/2021-trends-impact" target="_blank" rel="noreferrer noopener">report</a> published on Jan. 6, 2022.&nbsp;



Other cities and sovereign states are going to have to start thinking ahead if they want to maintain an edge, even if the value proposition of cryptocurrencies is not immediately clear, researchers said.&nbsp;



“While Rio de Janeiro is a city, and technically the mayor mentioned cryptocurrency, not bitcoin specifically, we see the overall game theory as the same,” said Chris Kuiper, head of research at Fidelity Digital Assets. “In other words, entities are viewing bitcoin acquisition now as a small insurance premium to pay.”&nbsp;



Paes also mentioned plans to offer citizens who pay property taxes (known in Brazil as IPTU) in bitcoins a discount, according to a report from the Brazilian newspaper <a href="https://oglobo.globo.com/economia/eduardo-paes-quer-aplicar-parte-do-tesouro-do-rio-em-criptomoeda-dar-desconto-para-iptu-pago-em-bitcoin-25353018" target="_blank" rel="noreferrer noopener">O Globo</a>.&nbsp;



Long-time <a href="https://cms.blockworks.co/new-york-mayor-eric-adams-i-will-take-first-three-paychecks-in-bitcoin/" target="_blank" rel="noreferrer noopener">cryptocurrency fan</a> Miami Mayor Francis Suarez also spoke at the Rio Innovation Week summit where Paes made the announcement. Suarez is looking to allocate a portion of Miami’s treasury to digital assets, he said last year.&nbsp;



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Fidelity: Rio de Janeiro Crypto Adoption is Only the Beginning

Jacquelyn Melinek

<div id="highlights-block_61ddecec4870e" class="highlights">
 <ul>
 <li>Last year there were lots of conversations surrounding crypto regulation and in the final months of 2021, US policymakers sent signals that greater oversight of this asset class is imperative</li>
 <li>The combination of proper regulation and financial firms working to offer investors access to digital assets will likely increase overall adoption of this financial sector, they said</li>
 </ul>
 
</div>



As crypto native firms continue to innovate and grow the industry, new regulation will “certainly be required,” Fidelity Digital Assets’ Director of Research Chris Kuiper and Research Analyst Jack Neureuter said in a <a href="https://www.fidelitydigitalassets.com/articles/2021-trends-impact" target="_blank" rel="noreferrer noopener">report</a>.&nbsp;



“Regulation and product access work hand in hand and we are hopeful that 2022 can bring about more clarity than prior years as we feel this is key to bringing a greater portion of the hundreds of trillions in traditional assets into the digital asset ecosystem,” they said.



In the final months of 2021, US policymakers <a href="https://cms.blockworks.co/crypto-companies-brace-for-year-of-regulation-in-2022/" target="_blank" rel="noreferrer noopener">sent signals</a> that greater oversight of this asset class is imperative.&nbsp;



Even as regulation loomed over the industry, retail and institutional investors&#8217; adoption increased dramatically. The total market capitalization for cryptocurrencies is $2 trillion, up over 110% from the year-ago date, <a href="https://coinmarketcap.com/charts/" target="_blank" rel="noreferrer noopener">data</a> on CoinMarketCap shows. At its peak, the total cryptocurrency market cap was almost $3 trillion on Nov. 9, 2021.&nbsp;



<blockquote class="wp-block-quote">“While its growth rate has been impressive, it is still relatively small compared to the hundreds of trillions of dollars in assets globally,” they wrote.</blockquote>



As the digital asset ecosystem expanded and in 2021, Kuiper and Neureuter expect institutional interest in DeFi to continue to grow this year.&nbsp;



The combination of proper regulation and financial firms working to offer investors access to digital assets will likely increase overall adoption, they said. “The key to allowing traditional allocators to continue to pour capital into the digital asset ecosystem revolves around regulatory clarity and accessibility,” Kuiper and Neureuter added. 



“Overall, we would say 2021 was a year that further confirmed digital assets have arrived and are here to stay,” they said.



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Fidelity Report: Crypto Regulation Will Be Required in 2022

Liz Coyne

Blockworks&#8217; <a href="https://youtube.com/playlist?list=PLvER9nHSRN3wZX2tI3JrCLOAzMBgUJtBo" target="_blank" rel="noreferrer noopener">Forward Guidance</a> podcast host Jack Farley sat down with Chris Tyrer, head of Fidelity Digital Assets Europe, at Blockworks <a href="https://cms.blockworks.co/events/das-london/" target="_blank" rel="noreferrer noopener">Digital Asset Summit in London</a> to discuss the role digital assets play in investment strategies today and in the future. 



Tyrer leads all client service activity for the region, addressing their needs to secure, trade, and support digital assets. Prior to joining Fidelity Digital Assets, he served as a managing director at Barclays Investment Bank, leading its digital assets project, which examined the market opportunities for the firm. He also served as global head of commodities trading for Barclays following a long career in traditional financial markets.



Watch the full interview below.



<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" title="Bitcoin&#039;s Growing Role In Portfolios | Fidelity Digital Assets&#039; Chris Tyrer" width="1024" height="576" src="https://www.youtube.com/embed/MYzEakD3BqE?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe>
</div></figure>



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<hr class="wp-block-separator"/>

Fidelity Digital Assets Europe Head: Bitcoin Will Play Prominent Role in Investment Portfolios

<div id="highlights-block_61af6d32cbb8f" class="highlights">
 <ul>
 <li>Alliance will create institutional platform to onboard traditional finance companies into the digital asset ecosystem, Nexo co-founder says</li>
 <li>Nexo’s client base can now use its credit and trading products with reliance on Fidelity Digital Assets’ custody and security solution</li>
 </ul>
 
</div>



Crypto firm <a href="https://nexo.io" target="_blank" rel="noreferrer noopener">Nexo</a> is partnering with Fidelity Digital Assets to boost institutional access to digital assets by offering custodial and lending services.



Nexo, a specialist of cryptocurrency-collateralized credit, and Fidelity Digital Assets as a custodian and collateral agent, will develop a product suite and compliant infrastructure for institutional investors seeking exposure to the asset class.



“On the one hand, what brought Nexo and Fidelity Digital Assets together was that we felt the pressing need to directly address institutional investors’ challenge of safely storing digital assets, which has historically limited the large players from entering the space,” Nexo Co-founder Kalin Metodiev told Blockworks. “On the other, we saw the once-in-a-lifetime opportunity to introduce services that simply do not exist to this day and this is precisely what we plan on doing through our collaboration.”



The partnership will offer an additional custody layer to Nexo’s security infrastructure. It allows institutional investors who currently custody their digital assets with Fidelity Digital Assets access to Nexo’s products and <a href="https://nexo.io/prime" target="_blank" rel="noreferrer noopener">crypto prime brokerage</a>. 



“We’ve seen tremendous growth of interest in digital assets from institutions within the European market and we’re committed to implementing sophisticated solutions to match those available with traditional asset classes,” Christopher Tyrer, head of Fidelity Digital Assets in Europe, said in a statement.&nbsp;



Nexo has processed more than $50 billion for 2.5 million users across more than 200 jurisdictions. Fidelity Investments, which had total discretionary assets of about $4.3 trillion as of the end of September, created Fidelity Digital Assets in 2018.&nbsp;&nbsp;



Another Fidelity Investments business — its Canadian subsidiary — was getting <a href="https://cms.blockworks.co/fidelity-set-to-launch-spot-bitcoin-etf-in-canada/" target="_blank" rel="noreferrer noopener">set to launch an ETF</a> that would invest directly in bitcoin. The Fidelity Advantage Bitcoin ETF (FBTC), which carries a management fee of 40 basis points, was to be listed on the Toronto Stock Exchange. 



Christine Sandler, head of sales and marketing at Fidelity Digital Assets, <a href="https://cms.blockworks.co/fidelity-digital-assets-sandler-the-regulatory-road-will-be-long/" target="_blank" rel="noreferrer noopener">said during Blockworks’ Digital Asset Summit</a> in September that the industry is in a period of mass expansion when it comes to digital asset adaptation, noting that regulation will follow.



The firm’s <a href="https://cms.blockworks.co/fidelity-most-institutional-investors-open-to-crypto-want-an-etf/" target="_blank" rel="noreferrer noopener">institutional investor study</a>, released that month, found that 84% of American and European institutional investors are interested in investment vehicles with exposure to digital assets.



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Nexo Partners with Fidelity Digital Assets

<div id="highlights-block_60ecac082c20a" class="highlights">
 <ul>
 <li>Fidelity Digital Assets reportedly plans to capitalize on rising ether demand, expand trading services</li>
 <li>Firm becomes latest company exploring ways to leverage DeFi, tokenized assets, and other blockchain capabilities as institutions look beyond traditional finance</li>
 </ul>
 
</div>



Fidelity’s digital assets arm is reportedly looking to up its headcount and expand its offerings as institutional investors continue allocating to cryptocurrencies.



The company is hoping to add 100 people specializing in technology and operations, Tom Jessop, president of Fidelity Digital Assets, said in an interview with Bloomberg. The additional workers would be based in Boston, Dublin and Salt Lake City.



“The fact that Fidelity is expanding its crypto team signals that demand is rising more broadly to the blockchain sector as a whole,” Barry Finkelstein, head of business development at <a href="https://www.algorand.com">Algorand</a>, told Blockworks. “All signs point to more asset managers getting involved.”



Fidelity Digital Assets began to research and development efforts in 2014, started mining bitcoin in 2015, and tested its first wallet and storage solution with employees in 2016, according to the firm’s website. The firm is focused on providing services to allow institutions to store, transact and support their digital asset investments.&nbsp;



Jessop told Bloomberg that Fidelity Digital Assets, which has offerings around Bitcoin, wants to “be ahead of [ether] demand,” and also wants to allow crypto trades throughout more of the week.



A firm spokesperson did not immediately respond to Blockworks’ request for comment.&nbsp;



“As institutions look beyond traditional financial offerings to service both retail and institutional customers, companies like Fidelity are exploring the best ways to leverage DeFi, tokenized assets, and other blockchain capabilities,” Finkelstein added. “Traditional finance can no longer ignore crypto or other blockchain utilizations, and will continue to evolve to provide value to customers while maintaining profits.&#8221;&nbsp;



The news comes as more large financial services companies are building out units focused on the crypto space.&nbsp;



State Street, which oversees $40 trillion in assets, <a href="https://cms.blockworks.co/state-street-launches-digital-finance-unit-for-crypto/">launched a new division</a> last month focused on the shift to digital finance, while Bank of America <a href="https://cms.blockworks.co/bank-of-america-launches-cryptocurrency-research-effort/">revealed last week</a> that it is set to begin research coverage of cryptocurrency and digital assets. PayPal and Visa have also put more resources toward crypto. The latter company recently announced <a href="https://cms.blockworks.co/visa-bolsters-crypto-division-with-new-hires-promotions/">new hires and promotions</a> to teams focused on partnering with exchanges, wallets, and platforms to help them issue Visa cards, as well as helping banks integrate crypto features.