Traditional and institutional investors may have more chances to access cryptocurrency markets thanks to two other big names joining the fray. As reported by FXEmpire on June 8, Citadel Securities has announced plans to build a cryptocurrency market with multiple partners.
It is reported that Charles Schwab and Fidelity will be among those who will partner with the company, with plans to launch the cryptocurrency market in early 2023.
Fidelity Investments provides financial planning, retirement planning, wealth management, trading and brokerage services. Last week it was reported that the company plans to fill 210 new positions for its Fidelity Digital Assets division, signaling long-term ambitions in the cryptocurrency space.
Charles Schwab (SCHW) is an American multinational financial services, bank and stockbroker with an electronic trading platform.
According to Barron's, a Schwab spokesperson confirmed entry into the cryptocurrency industry:
“Schwab made a strategic minority and passive investment in a new digital asset firm. We know that there is significant interest in the cryptocurrency space and we will look to invest in companies and technologies that work to offer access with a strong focus on regulation and in a safe environment. "
A spokesperson for Fidelity added: "Fidelity supports efforts that foster the efficiency of the digital asset market and provide greater opportunities for investors to obtain liquidity."
The move could be a big step towards the entry of more institutional and long-term investors. Current options are limited to cryptocurrency exchanges, which require some technical knowledge to use, and to platforms such as PayPal (PYPL), which recently enabled cryptocurrency withdrawals, or Robinhood (HOOD).
These major institutional players may be viewing the current bear market as a buying opportunity. The cryptocurrency markets have gone through several boom-bust cycles like this one over the past decade.
However, Schwab said it has no plans to offer direct cryptocurrency trading due to regulatory uncertainty in the US. The spokesperson continued:
"We recognize that there is considerable interest in cryptocurrencies, particularly in certain segments of the market, and we will consider introducing direct access to cryptocurrencies when there is greater regulatory clarity."
Fidelity does not yet offer direct cryptocurrency trading. Its clients can gain exposure to digital assets through thematic exchange-traded funds. It also announced its intention to provide access to Bitcoin (quotation BTC) in its 401 (k) plans, a move that attracted the attention of US politicians.
The winter of cryptocurrencies is getting worse
The cryptocurrency markets are back in the red again today, posting a 2% drop in total market capitalization over the past 24 hours. The figure currently stands at $ 1,29 trillion, down 58% from the peak of just over $ 3 trillion in November.
Cryptocurrency traders and analysts believe the cryptocurrency winter is even more painful. Previous bearish cycles have had a 'capitulation wick' - a massive final sell-off in which the last few weak hands have been swept away.