Fidelity Digital Assets, a subsidiary of Fidelity Investments, a leading financial service provider, announced that it will offer cash loans against a bitcoin collateral to its institutional clients in a Press release Wednesday. The financial service provider would offer these loans in association with the blockchain startup Block-fi which would act as a risk manager for the loans. Block-Fi would offer 60% cash of the total amount of bitcoin secured in the loan.
Fidelity Digital Assets is excited to enter the digital asset finance space with our new collateral agent capabilities. Customers can now pledge bitcoins as collateral against cash loan agreements managed by @BlockFi.
Read the full press release: https://t.co/5OdHtOU7Uh
– Loyalty digital assets (@DigitalAssets) December 9, 2020
Fidelity Investments would hold the secured bitcoin under its management and believe that the secured bitcoin cash lending would attract many institutional clients, including hedge funds, crypto miners, and over-the-counter trading desks. Tom Jessop, president of Fidelity Digital Assets, believes that the rise of bitcoin has generated a lot of institutional interest and that many clients hold part of their wallets in bitcoin. Thus, this offer from Fidelity would allow them to cash in their assets without selling them.
Fidelity sees Bitcoin as a potential future market of interest
Fidelity’s decision to offer a Bitcoin secured cash loan comes amid growing demand for bitcoins by institutional clients many hedge funds and asset managers. This is clear from the survey of asset managers conducted earlier this year where 36% of respondents held bitcoin in their wallet while 60% expressed interest in buying the best cryptocurrency. The president of Fidelity Digital Asset believes that holding Bitcoin to secure loans is “a fundamental ability”.
Christine Sandler, head of sales and marketing for Fidelity Digital Asset, said the decision to create a Bitcoin secured loan was based on growing demand. He explained,
“The commercial and market dynamics we have experienced this year have reinforced our belief that institutional investors are looking for a more complete offering in the area of digital assets, and we look forward to continuing to evolve our platform to meet their needs. needs and deliver even more value to our customers ”,
Fidelity Digital Assets has become the latest member of the “Bitcoin Institutional Club” which seems to be growing day by day. The institutional influx has given bitcoin gigantic exposure that can lead to a global market sooner rather than later.
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