With all the fanfare and expectations about the NYSE’s Bakkt project to trade “physical” cryptocurrencies and offer custody solutions, one very big name passed on the opportunity to invest; Fidelity. It is well known (at least to us since we have covered Fidelity’s crypto interest for years) that Fidelity’s CEO Abigail Johnson is a big bitcoin supporter and even does some bitcoin mining within the firm. So for Fidelity to jump in the “deep end” to establish an “in-house” crypto exchange and offer custodian services is really no surprise. But to turn down the NYSE? Fidelity is serious. Here is one informed source’s quote:
“The rumors out there stem from Fidelity passing on taking a stake in Bakkt and then have run amok from there. They’ve been just as secretive about their build as Bakkt was for nearly two years leading up to their announcement. All we know is what we hear from a couple guys that work at Fidelity, but even that is vague and a wink and a smile. But as we see stuff leaked via the media in some way it makes sense that they would scale up. Bakkt has all the institutional pipes, but Fidelity has that same access, but a massive retail name that can tap millions of customers.” Read more below. Its HUGE!
Bill Taylor/Fintek Capital
“We’ve chronicled the coming scale, architecture, institutional excitement, and pedigree of Bakkt on these pages for the past few weeks. Every crypto centric organization and personality of means is either financially or emotionally invested in the Bakkt launch and what it will mean for Bitcoin and the crypto ecosystem. Except for one big name…
In conversations with several sources in the know (some invested in Bakkt and some that are not; but still familiar with the equity offering) it came to our attention that Fidelity passed on a significant stake in Bakkt for one reason and one reason alone – they plan to compete directly with Bakkt in the crypto space with its own custody/warehousing and trading architecture.
This is the conversation in and around those in the know just beyond the ‘Bakkt story’.
Fidelity is said to have several working groups of scale preparing products and services within crypto that will compete directly with Bakkt for institutional clients, while on a faster path to offering those same products to its vast numbers of retail clients. A proposition that Bakkt has eschewed thus far.
One source with a deep understanding of Bakkt’s offering and knowledge of Fidelity’s decision to pass on an investment had this to say:
“…The real intrigue here is the rumor that Fidelity considers themselves to be crafting a real competitor to Bakkt…Bakkt is leveraging fifty plus years worth of exchange infrastructure to establish Bitcoin as a standard and then offer products that evolve from there. Fidelity is said to be further along in the way they plan to leverage that same architecture…”