Speaker 1: This is Bloomberg Crypto, a daily Bloomberg ihod podcast, and
Speaker 1: I'm Stacy Marie Ishmael, Managing editor of Crypto for Bloomberg News.
Speaker 1: It's Monday, January m Dana Hirich in today for Stacy
Speaker 1: Marie Ishmael. Longtime Fidelity customers have been getting some very
Speaker 1: interesting offers in their inboxes from the financial services company
Speaker 1: over the past several months, a new crypto trading platform
Speaker 1: for retail investors. Last November, the brokerage firm launched a
Speaker 1: wait list for those interested in services including custody and
Speaker 1: zero commission trading for bitcoin and ether. Fidelity Investments is
Speaker 1: one of the largest investment managers in the industry and
Speaker 1: is one of the first financial services firms to offer
Speaker 1: crypto trading to clients. Those who do want to dip
Speaker 1: their toes in the digital assets market had in the
Speaker 1: past used changes like f t X or coin base,
Speaker 1: but in the wake of the ft X collapse, news
Speaker 1: of fidelities digital access platform could just provide the crypto
Speaker 1: curious investor with an alternative opportunity. So what does fidelities
Speaker 1: new retail crypto trading platform and potentially any others like
Speaker 1: it mean for the industry and how might it shape
Speaker 1: the way retail investors interact with the digital assets market.
Speaker 1: My colleague, Claire Balantine is a Bloomberg reporter who covers
Speaker 1: personal finance, and she joins us. Now, I think for
Speaker 1: so long people think of it as separate. People think
Speaker 1: of crypto as not something you do in your Vanguard
Speaker 1: account or something. They think of it as like this
Speaker 1: totally separate entity. Okay, Claire, So maybe we can just
Speaker 1: start out with an introduction from you. Tell us a
Speaker 1: bit about what you cover a bloomberk. So I cover
Speaker 1: personal finance here, uh, and wealth trends basically is anything
Speaker 1: involving people and their money, particularly retail traders. Everyday people
Speaker 1: how they're trading, how they're investing, what they're investing in,
Speaker 1: um trends, and how they live their lives and think
Speaker 1: about work and their fun activities and how they handle
Speaker 1: their money. And possibly we could say that they haven't
Speaker 1: really been having so many fun activities when it comes
Speaker 1: to crypto, at least recently. Right, So, I wanted to
Speaker 1: ask you to give us a sentiment check on because
Speaker 1: you speak with so many people on a daily basis,
Speaker 1: what the mood music is like out there right now.
Speaker 1: When it comes to retail investors and crypto specifically and
Speaker 1: what they're feeling. What I think is really notable about
Speaker 1: this point in time is, you know, for so long
Speaker 1: I would talk to retail traders who are interested in
Speaker 1: crypto or who at least dipped their toes into crypto,
Speaker 1: and they were so optimistic about it, or they were
Speaker 1: so passionate and strong believers, And I think that's really
Speaker 1: been chipped away at throughout this whole f d X crisis.
Speaker 1: Definitely still have people that are you know, holding on,
Speaker 1: that are very hottling, that are hottling, that are very
Speaker 1: into crypto still, but it was the first time that
Speaker 1: I really saw that start to crack and people really wondering,
Speaker 1: you know, what am I doing with my money in
Speaker 1: these investments? Is this actually a good idea long term?
Speaker 1: How has that changed? You're talking about post f t
Speaker 1: X specifically, right, So that was the big breaking point.
Speaker 1: It sounds like for a lot of people, Oh absolutely.
Speaker 1: I think for a lot of people they thought fd
Speaker 1: X was the safe one. People also said that about
Speaker 1: about Voyager, about Celsius, and their confidence was chipped away
Speaker 1: at over the past year, and then when fd X happened,
Speaker 1: it was a big breaking point for a lot of people,
Speaker 1: especially those that have their money locked up. I mean
Speaker 1: that's something that's hard to move on from. Yeah, so
Speaker 1: what are retail investors doing right now? Are they totally
Speaker 1: staying away from crypto? Are they trading still? Are they
Speaker 1: still into coins, are they still into projects? Or have
Speaker 1: they been sort of broadly speaking, scared away from the space.
Speaker 1: I think a lot have been scared away. I think
Speaker 1: a lot of taken a step back, especially during the holidays.
Speaker 1: People have things going on. But I wouldn't say they're
Speaker 1: abandoning it completely in terms of sentiment. I think that
Speaker 1: people still want to trade, they want to be involved
Speaker 1: in markets. You know, it was it was fun for
Speaker 1: them and was largely successful for a long time, and
Speaker 1: they're not going to give that up completely. I think
Speaker 1: they've been shaken a bit. I do think that after FDx,
Speaker 1: there has been a move towards people investing more in
Speaker 1: things like bitcoin and ether and sticking with those well
Speaker 1: known names that they have a bit more faith in,
Speaker 1: rather than you know, random projects. I do think there's
Speaker 1: also been a big, big move to words people not
Speaker 1: having faith and online platforms moving their coins into cold
Speaker 1: storage for some figuring out how that works for the
Speaker 1: first time because they've only known trading on platforms like
Speaker 1: ft x and coin base. So especially the ones that
Speaker 1: are sticking with crypto, that are really invested in it,
Speaker 1: you know, not your keys, not your coins, has been
Speaker 1: the big refrain, and they're taking their assets off these
Speaker 1: online exchanges unless they've had their assets stuck ft X,
Speaker 1: for example. So can you just describe, let's say I
Speaker 1: had money that I put that I was trading on
Speaker 1: f t X, what happens to that money now that
Speaker 1: ft X is in bankruptcy and things have sort of
Speaker 1: been locked up, and then maybe tell us a bit
Speaker 1: more about my ability to get that money back. Yeah.
Speaker 1: So what we saw initially in the first few weeks
Speaker 1: of this happening, you know, we saw f t x,
Speaker 1: and then we saw things happening with Block five and
Speaker 1: with Gemini, it was really sporadic. Some people I was
Speaker 1: talking with were getting their money back, getting part of
Speaker 1: their money back. You know, there was still kind of
Speaker 1: some hope, I think right now, especially after you know,
Speaker 1: weeks even months have gone by, If people can't access
Speaker 1: their money, they're losing hope in a lot of ways.
Speaker 1: In terms of getting it back, still a possibility, but
Speaker 1: it gets complicated. These bankruptcy proceedings are happening, They're going
Speaker 1: to take months, maybe even years, and in the course
Speaker 1: of all of this, regular customers that have put in,
Speaker 1: you know, some of their savings are going to be
Speaker 1: the last to be paid back. So we saw this happen,
Speaker 1: and that's that's just based on how bankruptcy proceedings work
Speaker 1: in general, right exactly where others above the retail customers
Speaker 1: tend to get their money back first. Yes, the bigger
Speaker 1: creditors are first in line. You know, it all depends
Speaker 1: on how the bankruptcy structured and whatnot. But you know,
Speaker 1: the person with two thousand dollars in their account, well
Speaker 1: a lot of money to them, isn't very much in
Speaker 1: the grand scheme of, you know, a company in their bankruptcy.
Speaker 1: It was interesting in seeing Voyager play out earlier because
Speaker 1: it was sort of a case study for f t
Speaker 1: X and for what's happening the same with Celsius. At
Speaker 1: least at first, f t X, you know, bought Voyagers assets,
Speaker 1: so there was some hope that they could bail them
Speaker 1: out then that was up in the air, and now
Speaker 1: with f t X, you know what happens with the
Speaker 1: assets they have left and with the customers money. Really
Speaker 1: is just very up in the air and people are
Speaker 1: waiting to sort of see that play out. But I
Speaker 1: think a lot are losing hope. Can you maybe talk
Speaker 1: about the trust that people put into some of these names.
Speaker 1: So we mentioned already that f t X had before
Speaker 1: the bankruptcy and before everything fell apart, a very good
Speaker 1: standing in the crypto industry and a very good reputation
Speaker 1: for sort of being a solid place to beach reading.
Speaker 1: So talk about what sort of trust people had had
Speaker 1: in these types of places and how that has wrote
Speaker 1: it obviously, because it's very hard harrowing to to read
Speaker 1: stories about you know, families and and a son telling
Speaker 1: his dad to put his x percentage of his life
Speaker 1: savings into some of these platforms or to you know,
Speaker 1: to be yield farming on some of these platforms, and
Speaker 1: then two now us be writing about how that money
Speaker 1: is not likely to be coming back anytime soon. Yeah,
Speaker 1: I think it's hard to overstay just how much trust
Speaker 1: people had in these I think if you think about
Speaker 1: the crypto industry at large, especially you know, at its
Speaker 1: peak and when there was all this fervor around it.
Speaker 1: There are so many small little projects happening that we're
Speaker 1: popping up, you know, all the meme coins and things
Speaker 1: like that, and it's sort of all about the comparison.
Speaker 1: So compared to that kind of thing, you know, you
Speaker 1: think of a platform like FTX, especially with this sort
Speaker 1: of famous founder behind it, who a lot of people
Speaker 1: thought was this prodigy, and especially when you compare that
Speaker 1: to n f t s and dows and little coins
Speaker 1: that some people really really believed in, but a lot
Speaker 1: coins doggy coins, and in comparison to them, you know,
Speaker 1: platform like f TX, like Voyager, seemed very stable. I
Speaker 1: think it's all about the comparison in a lot of ways.
Speaker 1: But I think you're so right. People talk this up
Speaker 1: to their families. They said this is a way to
Speaker 1: make money, and for so long everything was going up
Speaker 1: in every way, and so it wasn't even incorrect in
Speaker 1: their predictions in a lot of ways. You know, as
Speaker 1: long as they got out in time, even with the
Speaker 1: stock market, you put money in, it was going up.
Speaker 1: That was the narrative, and it was the truth years
Speaker 1: exactly so then you know, when this collapse happened, it
Speaker 1: was hard for a lot of people to believe, especially
Speaker 1: if if this is they're one and only experience with investing,
Speaker 1: and they're so into the ecosystem and the Twitter community
Speaker 1: and the rabbit community and all their friends and people
Speaker 1: are talking up crypto. It was really a shock. I
Speaker 1: think when things collapsed. The reason I ask is because
Speaker 1: I think the majority of people would fall into this category,
Speaker 1: but then there's a small sliver of people. And you
Speaker 1: had this great story about this a couple of weeks
Speaker 1: ago post f t X, where you interviewed people who
Speaker 1: basically said, well, I knew there was huge risk involved,
Speaker 1: and I knew there was a possibility that I could
Speaker 1: lose my money, so I'm just going to move on
Speaker 1: with my life, right And I think, you know, I
Speaker 1: talked to financial advisors in addition to regular people, and
Speaker 1: unfortunately that is all as the advice that they give
Speaker 1: to people. If you had money in f t X,
Speaker 1: while there is a possibility you could get it back,
Speaker 1: in terms of planning your finances, moving on with your
Speaker 1: life considering that money gone is the smartest way to
Speaker 1: move forward in terms of planning your finances, which is
Speaker 1: really unfortunate. But I think there's so much interesting psychology
Speaker 1: that goes along with all of this. But in terms
Speaker 1: of moving on, sort of grieving this loss and then
Speaker 1: thinking forward about what you're going to do with your
Speaker 1: money moving forward is something that that some people really
Speaker 1: are doing and that I think a lot of financial
Speaker 1: advisors really endorse and encourage people to do. And although
Speaker 1: we do have a lot of retail investors staying away,
Speaker 1: a lot of institutions stay staying away, there's actually at
Speaker 1: least one company that's sort of making headlines for going
Speaker 1: further into crypto, and that's Fidelity, And I'm hoping you
Speaker 1: can lay out for us what exactly they're doing, because
Speaker 1: they have a ton of crypto offerings and they've been
Speaker 1: involved in some way with the crypto space for a
Speaker 1: number of years. So last November Burgrage firm, Fidelity launched
Speaker 1: a wait list for those interested in crypto trading services,
Speaker 1: planning to offer custody and zero commission trading for bitcoin
Speaker 1: and ether. Fidelity is one of the largest investment managers,
Speaker 1: so they have this name brand that they can really
Speaker 1: draw on, and they're doing a lot of marketing to
Speaker 1: promote this up next more with Bloomberg reporter Claire Balentine
Speaker 1: on the latest in retail crypto trading. We'll be right back.
Speaker 1: I get a lot of emails from Fidelity. I have
Speaker 1: a four one K account with Fidelity Disclosure, but I
Speaker 1: get a lot of emails from them basically saying things
Speaker 1: like five tips for how to manage x y z
Speaker 1: money or account or how to trade x y z.
Speaker 1: So is this something that they're doing when it comes
Speaker 1: to crypto as well. Definitely. Yeah, they are really promoting this,
Speaker 1: I think among their long time customers and offering the
Speaker 1: chance to be you know, the first into this. Talk
Speaker 1: about kind of bad timing in a way with starting
Speaker 1: this last November, but they are continuing to roll it out. Um,
Speaker 1: there's no official start date yet, but it does seem
Speaker 1: like now, especially as we've seen bitcoin rally recently, they're
Speaker 1: moving ahead with this and you know, going to provide
Speaker 1: this opportunity for interested investors. It's possibly the worst timing
Speaker 1: in the universe. And they also had at one point
Speaker 1: last year rolled out a four one K option right right,
Speaker 1: And I think that is appealing to a lot of
Speaker 1: people in a lot of ways. But then you see
Speaker 1: it happened with FDx that caused a major blow to
Speaker 1: all the confidence. But you know, moving forward, I think
Speaker 1: it's something that people do want the ten to do.
Speaker 1: So it's you know, we'll see how much interest there
Speaker 1: is in this Fidelity offering, but it's something that definitely
Speaker 1: can find an audience. It's so fascinating to see people
Speaker 1: pushing forward into the space, and you know, you you
Speaker 1: have to at a certain point. You know, maybe not
Speaker 1: the most ideal timing, but yeah, they are. They're moving
Speaker 1: forward with their crypto offerings, and to be fair, you know,
Speaker 1: it's a platform like Fidelity does sort of give a
Speaker 1: lot of legitimacy to crypto trading because they are kind
Speaker 1: of this trusted investment manager. So they're still providing investors
Speaker 1: an opportunity, which you know makes sense in a lot
Speaker 1: of ways, because I don't think anyone's saying crypto is
Speaker 1: going away. This is a major major setback, but especially
Speaker 1: for Bitcoin, for the well known coins, you know, people
Speaker 1: are still optimistic about it in a lot of ways.
Speaker 1: So yeah, this has the potential to really entice some
Speaker 1: retail invest Sutter's back into the market and something that
Speaker 1: they trust more I think that's going to be the
Speaker 1: key thing moving forward in both crypto industry and the
Speaker 1: more traditional investment management industry. It's trust and providing investors
Speaker 1: with a sense of confidence and security in their trading.
Speaker 1: And it's going to be an uphill battle, I think.
Speaker 1: But you know, a firm like Fidelity that already has
Speaker 1: this sort of trust built in isn't a good position
Speaker 1: to move forward. And just as a side note, we
Speaker 1: did reach out to Fidelity. We were hoping to talk
Speaker 1: to them about these crypto offerings, and they told us
Speaker 1: that they're not yet ready to be talking about their
Speaker 1: crypto offerings at least for another couple of months. When
Speaker 1: you are talking to everyday investors, is this something they're
Speaker 1: telling you they would like to be seeing from their
Speaker 1: brokerage accounts where they're you know, offering up these new
Speaker 1: crypto trading options or for one K options. Is that
Speaker 1: something people actually want? That's a great question. I think
Speaker 1: for so long, people think of it as separate. People
Speaker 1: think of crypto as not something you do in your
Speaker 1: Vanguard account or something. They think of it as like
Speaker 1: this totally separate entity. I do think that people want
Speaker 1: a way to invest in crypto for their retirement. I
Speaker 1: have heard that whether or not that's a little bit
Speaker 1: or a lot varies, but I think people want options.
Speaker 1: People want the ability to do what they believe in,
Speaker 1: especially for tax deferred accounts, is really appealing to them.
Speaker 1: So I think there definitely is a market for this.
Speaker 1: I don't think anyone is saying put all of your
Speaker 1: four one K and crypto, but to have this opportunity,
Speaker 1: I think is something investors do want to at least
Speaker 1: have the option. Claire, I heard you have of your
Speaker 1: four one K and cryptocurrencies, all of it. My one time,
Speaker 1: I made the terrible mist ache of looking up my
Speaker 1: target retirement date with crypto, with crypto, with my crypto,
Speaker 1: with my career, and there's nothing that's more discouraging than
Speaker 1: realizing that you have to work another forty years before
Speaker 1: you get four hundred years. Four hundred years if you
Speaker 1: invest in crypto. Maybe thanks so much for joining us.
Speaker 1: Things that was Bloomberg reporter Claire Valentine. You can find
Speaker 1: more of her work on the Bloomberg terminal and on
Speaker 1: Bloomberg dot com. For more, be sure to check out
Speaker 1: our twice weekly newsletter, Bloomberg Crypto We'll see you next time.
Speaker 1: This is Bloomberg Crypto, a daily podcast from Bloomberg and
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Speaker 1: The supervising producer of Bloomberg Crypto is Vicky Vergolina. Our
Speaker 1: senior producer is Janet Babin. Our producers are Mohammed Farouk
Speaker 1: and Sharon Barriro. Our associate producers are Ty Butler and
Speaker 1: Moses on Them. Desta wonder At is our engineer. Original
Speaker 1: music by Leo Sidrn. I'm Stacy Mariashmal. We'll be back
Speaker 1: tomorrow