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Wealth managers still learning about cryptos, says Fidelity

Updated: Aug 31, 2024
Published: Mar 24, 2021
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Institutional investors and corporate entities are venturing into the cryptocurrency space as more of them now believe in the power of Bitcoin and other digital currencies. However, the cryptocurrency space is relatively new and most traditional financial experts don’t know much about them. Despite that, they are making the moves to learn about cryptocurrencies.

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Wealth managers are educating themselves on crypto

The boss of Fidelity Investments’ institutional arm Mike Durbin believes that most wealth managers and financial advisors are in the process of learning about cryptocurrencies as demands for the new asset class amongst wealthy investors grow.

During an interview with Reuters, Durbin stated that wealthy people have become comfortable with cryptocurrencies despite most of them struggling to understand the technology. “They know what they are doing, and more importantly, their end investor base also knows what they are doing - but the vast majority are still in the education mode,” he added.

Interest from Fidelity is a huge boost for the cryptocurrency space as investment firm currently has nearly $10 trillion in assets under management. Durbin believes that interest in Bitcoin and other cryptocurrencies will grow as alternative investments, similar to real estate, private equity and hedge funds.

“I think that the growth rate of bitcoin or digital assets will follow in that wake of broader alternative investments. There’s still work to be done there to help advisors understand portfolio construction with these kinds of expressions,” he concluded.

Institutional interest in cryptocurrencies on the rise

Cryptocurrencies have been gaining widespread institutional interest over the past year. An increasing number of financial institutions and corporate entities have either invested in cryptocurrencies or plan to do so.

Thanks to the institutional investors, the cryptocurrency market has gained billions of dollars over the past year. This has helped push Bitcoin’s price above the $60,000 mark, rising by more than 500% over the past six months.

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