Fidelity Investments has formally launched its new cryptocurrency offering for individual investors, which may be the company’s 40 million individual clients’ first introduction to digital assets.
Customers on its cryptocurrency waiting list are now receiving notifications from the giant in asset management when it’s okay for them to sign up.
Investors who are interested in cryptocurrencies and who already know and trust Fidelity with their assets may find Fidelity Crypto to be a compelling option.
However, if you’re a fervent crypto investor already, it’s unlikely that you’ll be interested in switching only for these new services. Although Fidelity’s cheap trading fees are competitive with some of the top cryptocurrency exchanges, the firm’s advertised selection and crypto functionality are not yet up to standard.
For instance, Fidelity will initially exclusively offer Bitcoin and Ethereum as cryptocurrencies. Furthermore, users won’t be able to transfer or receive bitcoin through their accounts, which is necessary if they wish to utilize cryptocurrencies for online payments or to access blockchain-based services. But you will be able to exchange your cryptocurrency for fiat money.
Reasons to consider joining
Consider the following points when you assess Fidelity’s cryptocurrency services.
Crypto trading fees
Customers may trade cryptocurrency “commission-free” according to Fidelity. That does not imply that trade is always free. The business claims it will accept a spread on cryptocurrency trades of up to 1%.
Still, compared to other crypto services NerdWallet has analyzed, that’s rather decent. The largest cryptocurrency-only exchange in the United States, Coinbase, regularly levies a $2.99 fee on straightforward transactions, which is more than 1% on modest purchases.
Depending on how you pay, fees for other crypto services might be much higher, some even going up to 10%.
Funding and minimums
If you currently have a brokerage or cash management account with Fidelity, funding a crypto account can be simple. You can transfer funds between Fidelity accounts and Fidelity Crypto.
A cryptocurrency trading account may be opened with no minimum deposit. According to Fidelity, the minimum cryptocurrency purchase is $1. These elements placed the business on an equal basis with the majority of other major exchanges.
Making purchases will need you to open and fund an account, such as a brokerage or cash management account, if you don’t already have one with Fidelity.
Why you might choose to use a different exchange
Availability
Initial availability for Fidelity Crypto is in 35 states. You will need to choose an alternative if your state does not allow access to the service.
Crypto selection
Among the cryptocurrency exchanges that NerdWallet has analyzed, Fidelity Crypto’s offerings are at the low end. Granted, Bitcoin and Ethereum are the two most valued cryptocurrencies, making them the most popular and established in this developing market.
The buyers and sellers of cryptocurrencies, however, frequently consider a wider range of possibilities. Another significant cryptocurrency exchange, Crypto.com, offers more than 250 coins for purchase. Additional brokerages provide more cryptocurrency alternatives. Webull, as an illustration, has roughly 40.
It may turn out that Fidelity takes the same route as other brokerages, including Robinhood, which began with a small selection of cryptocurrencies before gradually expanding.
Whether customers may trade cryptocurrencies for one another, a feature that top rivals often provide, is not immediately apparent from the information provided on Fidelity’s website.
Functionality
Some of the sophisticated features seen on other exchanges are absent from Fidelity Crypto. It forbids the practice of staking, which some cryptocurrency owners use to generate benefits equivalent to interest.
And unlike some other cryptocurrency exchanges, Fidelity Crypto only allows trading to take place at 4 a.m., not offering 24-hour crypto transactions. to 12 a.m. time zone east.
Finally, the business claims that it prohibits clients from transferring bitcoin outside of their accounts or to third-party crypto wallets.
If you want to use cryptocurrencies for anything other than merely holding it in the expectation that its value will rise, transfers are essential. For example, Fidelity-purchased cryptocurrency cannot be used with decentralized finance products.
Despite the fact that Fidelity’s initial attempt at a consumer cryptocurrency product isn’t the most robust available, the company’s reputation and track record may provide certain clients a sense of confidence investing in a novel and hazardous asset class like crypto. Additionally, the business has kept the option open to eventually add more features and capabilities.
