Fidelity Institution's President Advocates Room for Consumers to Acquire More Crypto

Michael Durbin, the Fidelity Institutional President is advocating for more digital currency allocations for consumers in a bid to match the current demand.

Speaking at a Securities Industry and Financial Markets Association's annual meeting in New York City, Durbin said institutional investors will need to be conservative in allocating funds for consumers after conducting a proper risk assessment.

“As digital assets extend beyond cryptocurrencies and other sorts of wrapped tokens, or whatever the regulatory environment facilitates for us, we think there will be an increased funding for that portfolio construction,” Durbin said. “A basis to get more digital assets into the end consumer portfolios.”

The digital currency ecosystem is highly volatile and this will still make investments to be at risk. The cryptocurrency industry has trillions of Dollars since it attained its peak in November 2021 as lower prices and collapsing firms have generally made sentiments to be bearish in the space as a whole.

Durbin advocated that caution should be the watchword for crypto investors when choosing assets to allocate investors funds into.

“What we'll be putting out to advisors is just be careful in your risk budget if you're going to allocate any money to bitcoin for alpha creation,” Durbin said. “You better set aside a pretty meaningful amount of your risk budget, which can be defendable, but that's sort of the evolution we need to get into.” 

Fidelity has played a frontline role in helping to break the barriers for institutional investors to get involved in the crypto ecosystem. Besides launching an avenue for 401(k) subscribers to invest in digital currencies, the firm has been operating its crypto custody business since 2019, paving the way for institutions to safeguard the coins they invest in.

Fidelity has tried launching a Bitcoin-based exchange-traded fund (ETF) product, but in the SEC’s characteristic manner, its application has been rejected alongside others.