By owais ahmad
On Dec 10, 2020
Fidelity Digital Assets, in partnership with BlockFi, which is the blockchain startup of its corporate customers, will offer loans to its corporate customers in exchange for Bitcoin collateral.
Recently, the interest of institutional investors and firms in cryptocurrencies has started to grow. An important step in this context came from Fidelity Digital. Fidelity Digital announced that it will give hedge funds and other institutional clients the option to use Bitcoin as collateral. Bitcoin volatility will be managed by BlockFi, with cash worth 60% of a loan backed by the digital asset. In order to get a loan from this service, a Fidelity customer must have an account with BlockFi. This step that Fidelity Digital has taken for its corporate customers can play a significant role in Bitcoin adoption.
In an interview, Tom Jessop, president of Fidelity Digital Assets, made statements about this great step. Tom Jessop said that the firm’s clients include cryptocurrency miners, hedge funds, and OTCs. He added that keeping Bitcoin to support loans would be “a fairly important part of the ecosystem.”
During the past months, the largest cryptocurrency by market cap has long attracted huge investor interest. Increased interest brought with it the price surge, and Bitcoin broke the record. A survey conducted by Fidelity in early 2020 revealed that institutional investor interest in leading crypto is growing. The research, in which approximately 800 institutional investors participated, revealed that 36% of the participants had cryptocurrencies in their portfolios. And this figure even increased from 22 percent to 27 percent in 2019. The US investment giant also praised Bitcoin and advised investors to take closer attention to this leading crypto. Although Fidelity launched its Bitcoin custody service last year, today’s announcement is the first to allow cryptocurrencies to be used as collateral.
After Bitcoin hit an all-time high, it retreated. The leading cryptocurrency declined around $ 1000-1500. It is currently trading around $ 18,210.
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Disclaimer: All information provided in the content is for informational purposes only and should not perceive as an investment, financial, or trading advice. Any investment decision you make should be a personal choice based on financial knowledge, experience, and market research.
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