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(OTC) Trading Counter, Bitcoin, Bitcoin Collateral, Bitcoin Volatility, Blockfi, Crypto Miners, Crypto Custody, Digital Currency, Fidelity Digital Assets, Fidelity Investments, Hedge Funds, Institutional Investors
Fidelity Digital said it will allow institutional clients to cooperate with Blockfi to use Bitcoin as collateral for cash loans. The company’s decision helps Bitcoin investors turn their digital assets into cash without having to sell. Fidelity’s target customers include hedge funds, crypto miners and over-the-counter trading desks.
Citing a report by Tom Jessop, President of Fidelity Digital Assets, the company also envisages that “the duration of these loans is longer than a typical repurchase transaction.” Jessop added:
We hope to develop world-class brokerage capabilities for all types of assets.
Fidelity’s digital asset division decided to accept Bitcoin as collateral because the company continues to report that institutional interest in digital currencies is rising. A previous survey conducted by the company found that 36% of respondents hold cryptocurrencies in their portfolios. In addition, about 60% of people expressed interest in Bitcoin and other cryptocurrencies, while 47% of people expressed similarities in 2019.
Despite this, the report clarified that in order to benefit from loan services, “Fidelity customers must have an account with Blockfi.”
At the same time, Blockfi CEO Zac Prince stated that his company “will respond to the famous Bitcoin volatility risk by providing 60% of the value of cash for loans backed by digital assets.” However, he added that the plan will also There is “customer-level customization space that can be adjusted to meet the needs of large enterprises.”
What do you think of Fidelity’s decision to accept Bitcoin as collateral? Tell us what you think in the comments section below.
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