Bitcoin little moved as Fidelity prepares custodian services launch
In December 2017, there was excitement in the cryptocurrencies industry when CBOE and CME launched Bitcoin futures in their exchanges. The excitement was because many participants in the industry believed there would be more demand as institutional investors raise their stakes. However, the opposite happened and instead of buying, institutional investors shorted the currency. This was one of the reasons why the price dropped sharply in 2017.
Last year, prices rose when BlackRock announced that it was exploring ways to invest in the cryptocurrencies market. This happened when the bank was releasing the earnings for the second quarter. However, the investment manager did not disclose more details in the next conference calls. Soon afterwards, Fidelity announced that it would launch custodial services for crypto.
Yesterday, Bloomberg reported that Fidelity will launch the custodial service in March. This was viewed as a positive thing for the market because it would mean safe storage for cryptocurrencies by large institutions. Fidelity has been a major proponent for digital currencies. In 2017, the company started to mine currencies. In the article, Fidelity said that:
We are currently serving a select set of eligible clients as we continue to build our initial solutions. Over the next several months, we will thoughtfully engage with and prioritize prospective clients based on needs, jurisdiction and other factors.
This news came after a new report showed the level of cybertheft in the cryptocurrencies industry. A report by CipherTrace said that currencies worth more than $1.7 billion were stolen in 2018. This comes a few days after another report showed that more than $1 billion of crypto was stolen by two groups known as Alpha and Beta.
This was probably the reason why the price of Bitcoin did not rise as much with the announcement from Fidelity. The price remains within the narrow range shown below. As such, it is along the moving averages. This consolidation could mean more volatility or sharper movements in the days to come.