Fidelity's Crypto Investment: Exploring Their Digital Currency Portfolio

Fidelity is one of the largest asset managers and brokerages in the US. In 2018, it launched Fidelity Digital Assets, a limited liability corporation designed to serve institutional customers and allow them access to the growing cryptocurrency investing environment. Fidelity Digital Assets offers offline cold storage custody solutions, trade execution, and other services. The company also offers a crypto platform for individual investors called Fidelity Crypto, which enables them to buy and sell digital assets through the Fidelity Investments App. The platform currently supports only two cryptocurrencies: Bitcoin and Ethereum.

Fidelity Crypto®

It is important to note that crypto is a high-risk investment with volatile price movements. As such, it may not be suitable for all investors, and individuals should carefully consider their risk tolerance before investing.

Fidelity Digital Assets

In addition to its trading platform, Fidelity Digital Assets provides educational resources for institutional clients to help them understand crypto as an asset class. This includes in-depth education and curated thought leadership, with exclusive insights for clients.

Fidelity Wise Origin Bitcoin Fund

The Fidelity Wise Origin Bitcoin Fund (FBTC) is an exchange-traded product that tracks the performance of Bitcoin. FBTC offers investors exposure to the price of Bitcoin without having to buy it directly. This fund is for investors with a high-risk tolerance as it invests in a single asset, Bitcoin, which is highly volatile and can become illiquid at any time.

The FBTC fund is passively managed and holds 100% Bitcoin. It is not registered under the Investment Company Act of 1940 and is not subject to regulation under the Commodity Exchange Act of 1936. As a result, shareholders of FBTC do not have the same protections as those investing in a registered investment company or a CEA-regulated instrument.

Fidelity Digital Assets provides custody of the Bitcoin in the FBTC fund, utilising extensive operational, cyber, and physical controls to secure the assets. The fund's net asset value (NAV) generally reflects the price changes of spot Bitcoin and is struck at 4 pm ET on weekdays.

The FBTC fund can be accessed through most brokerage, trust, and IRA accounts. It offers competitive pricing, intraday liquidity, and no lockups. FBTC provides standard reporting, transparent pricing, and a familiar investment structure, making it easier for advisors to integrate digital assets into client portfolios.

Fidelity has been researching Bitcoin and blockchain technology since 2014. With over 70 years of securities market experience, they are committed to innovation and developing a blockchain ecosystem to become a holistic solutions provider.

Fidelity Metaverse ETF

The Fidelity Metaverse ETF (FMET) is an exchange-traded fund that offers investors exposure to the emerging digital world of the metaverse. The fund seeks to provide investment returns that correspond to the performance of the Fidelity Metaverse Index, investing in companies that are involved in creating the metaverse through digital content, infrastructure, and wearable technology.

The fund does not directly invest in cryptocurrencies or use digital asset derivatives. Instead, it focuses on companies engaged in activities related to the metaverse, digital assets, and digital payment processing. Metaverse companies, however, come with a variety of risks, including limited product lines, markets, financial resources, and personnel. They also face intense competition, rapid product obsolescence, and the ever-present threat of cybersecurity attacks.

As of September 2024, the fund's total net assets were valued at $16.400M, with a net expense ratio of 0.39%. The average volume of shares traded is 4.86K, with a 52-week range of $19.17 to $28.00.

Fidelity's Metaverse ETF provides investors with an opportunity to explore the potential of a virtual world built on blockchain technology without directly investing in cryptocurrencies.

Fidelity Crypto Industry and Digital Payments ETF

The Fidelity Crypto Industry and Digital Payments ETF (FDIG) is an exchange-traded fund (ETF) that offers investors exposure to the cryptocurrency and blockchain industry without directly investing in digital assets. Instead, it invests in companies that are engaged in activities related to digital assets, blockchain technology, and digital payment processing.

The fund seeks to provide investment returns that correspond to the performance of the Fidelity Crypto Industry and Digital Payments Index. This index is designed to reflect the performance of companies involved in cryptocurrency, blockchain technology, and digital payments processing worldwide.

The FDIG ETF includes companies that derive a significant portion of their revenue from these sectors. To be included in the fund, companies must derive at least 50% of their revenue from cryptocurrency, blockchain, or digital payments. The fund is weighted based on the average daily trading volume of the constituent companies, with at least 60% of the fund comprising crypto-related stocks and the remaining 20% consisting of digital payment stocks.

As of August 30, 2024, the top holdings of the FDIG ETF included well-known companies in the cryptocurrency space, such as Coinbase Global Inc. and Marathon Digital Holdings Inc. The fund had approximately $69.10 million in total net assets, with an expense ratio of 0.39%.

The FDIG ETF provides investors with a way to gain exposure to the cryptocurrency industry while diversifying their risk across a basket of companies operating in this space. It is important to note that investing in the cryptocurrency industry carries a high level of risk due to the volatile nature of the underlying assets and the potential for rapid technological changes.

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