Fidelity says that as cryptocurrencies become mainstream and prove to have longevity, more clients are asking financial advisors about the benefits and risks of these investments. The company currently advises advisors to help clients navigate the complexities of investing in cryptocurrencies.
Fidelity claims regarding digital assets are becoming more common in advisor-client conversations
fact:
Fidelity, a financial counseling and brokerage firm with more than $16.4 trillion in assets under management (AUM), claims that conversations about digital assets as investment tools are occurring more frequently among financial advisors and their clients.
Fidelity Digital Assets, a Fidelity subsidiary that specializes in these investments, posted on social media that these conversations are becoming increasingly common and that advisors need to be prepared to guide clients in decisions about whether to invest or transfer cryptocurrencies.
For Brian Murphy, founder of Pariveda Investment Management, and Jackson Wood, portfolio manager of Freedom Day Solutions, the most frequently asked questions revolve around three main themes. These are the volatility of digital assets, the choice of which digital assets to invest in, and the custody of these assets.
Fidelity explains that while some may think of Bitcoin as a volatile asset, it is actually less volatile than some stocks such as Meta, NVIDIA, and Tesla.
On the question of which digital assets to invest in, Fidelity sees Bitcoin as an entry point for traditional allocators, emphasizing that Bitcoin is “fundamentally different from other digital assets currently available.”
Finally, investors should instruct their clients to decide whether to self-custody or entrust management of these assets to a custodian.
Why it's relevant:
Financial companies like Fidelity can be a starting point for investing in cryptocurrencies for hundreds of thousands of customers interested in these options. With the growing buzz of digital assets as investments, it's important for advisors to be able to chat with their clients and pinpoint the benefits and drawbacks of digital assets.
Fidelity and other financial companies could be the catalyst for Bitcoin and other crypto assets to become a more popular choice for retail and institutional investors.
Looking forward to:
As awareness of the crypto asset class continues to grow, analysts expect more people to enter the crypto investment space. Financial advisors must be ready to guide their clients' interests and offer the most appropriate options while explaining the real risks associated with digital assets.
FAQ ðŸ§
What recent trends has Fidelity observed regarding digital assets?
Fidelity reports that there has been a significant increase in conversations between financial advisors and their clients regarding digital assets as investment tools.What are the key questions financial advisors often get asked about digital assets?
Advisors frequently field questions about digital asset volatility, which assets to invest in, custody options, and more.How does Fidelity characterize Bitcoin volatility compared to stocks?
Fidelity notes that Bitcoin has lower volatility than some major stocks such as Meta, Nvidia, and Tesla.Why is Fidelity’s role important in digital asset investing?
As a leading financial company, Fidelity has helped thousands of customers navigate the complexities of crypto investing, potentially paving the way for broader acceptance among retail and institutional investors.
