WEBVTT - Should You Try Fidelity's New Crypto Platform?

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<v Speaker 1>This is Bloomberg Crypto, a daily Bloomberg ihod podcast, and

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<v Speaker 1>I'm Stacy Marie Ishmael, Managing editor of Crypto for Bloomberg News.

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<v Speaker 1>It's Monday, January m Dana Hirich in today for Stacy

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<v Speaker 1>Marie Ishmael. Longtime Fidelity customers have been getting some very

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<v Speaker 1>interesting offers in their inboxes from the financial services company

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<v Speaker 1>over the past several months, a new crypto trading platform

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<v Speaker 1>for retail investors. Last November, the brokerage firm launched a

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<v Speaker 1>wait list for those interested in services including custody and

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<v Speaker 1>zero commission trading for bitcoin and ether. Fidelity Investments is

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<v Speaker 1>one of the largest investment managers in the industry and

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<v Speaker 1>is one of the first financial services firms to offer

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<v Speaker 1>crypto trading to clients. Those who do want to dip

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<v Speaker 1>their toes in the digital assets market had in the

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<v Speaker 1>past used changes like f t X or coin base,

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<v Speaker 1>but in the wake of the ft X collapse, news

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<v Speaker 1>of fidelities digital access platform could just provide the crypto

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<v Speaker 1>curious investor with an alternative opportunity. So what does fidelities

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<v Speaker 1>new retail crypto trading platform and potentially any others like

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<v Speaker 1>it mean for the industry and how might it shape

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<v Speaker 1>the way retail investors interact with the digital assets market.

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<v Speaker 1>My colleague, Claire Balantine is a Bloomberg reporter who covers

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<v Speaker 1>personal finance, and she joins us. Now, I think for

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<v Speaker 1>so long people think of it as separate. People think

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<v Speaker 1>of crypto as not something you do in your Vanguard

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<v Speaker 1>account or something. They think of it as like this

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<v Speaker 1>totally separate entity. Okay, Claire, So maybe we can just

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<v Speaker 1>start out with an introduction from you. Tell us a

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<v Speaker 1>bit about what you cover a bloomberk. So I cover

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<v Speaker 1>personal finance here, uh, and wealth trends basically is anything

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<v Speaker 1>involving people and their money, particularly retail traders. Everyday people

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<v Speaker 1>how they're trading, how they're investing, what they're investing in,

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<v Speaker 1>um trends, and how they live their lives and think

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<v Speaker 1>about work and their fun activities and how they handle

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<v Speaker 1>their money. And possibly we could say that they haven't

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<v Speaker 1>really been having so many fun activities when it comes

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<v Speaker 1>to crypto, at least recently. Right, So, I wanted to

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<v Speaker 1>ask you to give us a sentiment check on because

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<v Speaker 1>you speak with so many people on a daily basis,

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<v Speaker 1>what the mood music is like out there right now.

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<v Speaker 1>When it comes to retail investors and crypto specifically and

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<v Speaker 1>what they're feeling. What I think is really notable about

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<v Speaker 1>this point in time is, you know, for so long

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<v Speaker 1>I would talk to retail traders who are interested in

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<v Speaker 1>crypto or who at least dipped their toes into crypto,

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<v Speaker 1>and they were so optimistic about it, or they were

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<v Speaker 1>so passionate and strong believers, And I think that's really

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<v Speaker 1>been chipped away at throughout this whole f d X crisis.

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<v Speaker 1>Definitely still have people that are you know, holding on,

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<v Speaker 1>that are very hottling, that are hottling, that are very

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<v Speaker 1>into crypto still, but it was the first time that

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<v Speaker 1>I really saw that start to crack and people really wondering,

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<v Speaker 1>you know, what am I doing with my money in

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<v Speaker 1>these investments? Is this actually a good idea long term?

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<v Speaker 1>How has that changed? You're talking about post f t

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<v Speaker 1>X specifically, right, So that was the big breaking point.

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<v Speaker 1>It sounds like for a lot of people, Oh absolutely.

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<v Speaker 1>I think for a lot of people they thought fd

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<v Speaker 1>X was the safe one. People also said that about

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<v Speaker 1>about Voyager, about Celsius, and their confidence was chipped away

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<v Speaker 1>at over the past year, and then when fd X happened,

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<v Speaker 1>it was a big breaking point for a lot of people,

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<v Speaker 1>especially those that have their money locked up. I mean

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<v Speaker 1>that's something that's hard to move on from. Yeah, so

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<v Speaker 1>what are retail investors doing right now? Are they totally

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<v Speaker 1>staying away from crypto? Are they trading still? Are they

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<v Speaker 1>still into coins, are they still into projects? Or have

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<v Speaker 1>they been sort of broadly speaking, scared away from the space.

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<v Speaker 1>I think a lot have been scared away. I think

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<v Speaker 1>a lot of taken a step back, especially during the holidays.

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<v Speaker 1>People have things going on. But I wouldn't say they're

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<v Speaker 1>abandoning it completely in terms of sentiment. I think that

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<v Speaker 1>people still want to trade, they want to be involved

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<v Speaker 1>in markets. You know, it was it was fun for

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<v Speaker 1>them and was largely successful for a long time, and

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<v Speaker 1>they're not going to give that up completely. I think

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<v Speaker 1>they've been shaken a bit. I do think that after FDx,

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<v Speaker 1>there has been a move towards people investing more in

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<v Speaker 1>things like bitcoin and ether and sticking with those well

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<v Speaker 1>known names that they have a bit more faith in,

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<v Speaker 1>rather than you know, random projects. I do think there's

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<v Speaker 1>also been a big, big move to words people not

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<v Speaker 1>having faith and online platforms moving their coins into cold

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<v Speaker 1>storage for some figuring out how that works for the

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<v Speaker 1>first time because they've only known trading on platforms like

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<v Speaker 1>ft x and coin base. So especially the ones that

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<v Speaker 1>are sticking with crypto, that are really invested in it,

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<v Speaker 1>you know, not your keys, not your coins, has been

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<v Speaker 1>the big refrain, and they're taking their assets off these

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<v Speaker 1>online exchanges unless they've had their assets stuck ft X,

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<v Speaker 1>for example. So can you just describe, let's say I

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<v Speaker 1>had money that I put that I was trading on

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<v Speaker 1>f t X, what happens to that money now that

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<v Speaker 1>ft X is in bankruptcy and things have sort of

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<v Speaker 1>been locked up, and then maybe tell us a bit

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<v Speaker 1>more about my ability to get that money back. Yeah.

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<v Speaker 1>So what we saw initially in the first few weeks

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<v Speaker 1>of this happening, you know, we saw f t x,

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<v Speaker 1>and then we saw things happening with Block five and

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<v Speaker 1>with Gemini, it was really sporadic. Some people I was

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<v Speaker 1>talking with were getting their money back, getting part of

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<v Speaker 1>their money back. You know, there was still kind of

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<v Speaker 1>some hope, I think right now, especially after you know,

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<v Speaker 1>weeks even months have gone by, If people can't access

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<v Speaker 1>their money, they're losing hope in a lot of ways.

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<v Speaker 1>In terms of getting it back, still a possibility, but

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<v Speaker 1>it gets complicated. These bankruptcy proceedings are happening, They're going

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<v Speaker 1>to take months, maybe even years, and in the course

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<v Speaker 1>of all of this, regular customers that have put in,

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<v Speaker 1>you know, some of their savings are going to be

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<v Speaker 1>the last to be paid back. So we saw this happen,

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<v Speaker 1>and that's that's just based on how bankruptcy proceedings work

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<v Speaker 1>in general, right exactly where others above the retail customers

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<v Speaker 1>tend to get their money back first. Yes, the bigger

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<v Speaker 1>creditors are first in line. You know, it all depends

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<v Speaker 1>on how the bankruptcy structured and whatnot. But you know,

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<v Speaker 1>the person with two thousand dollars in their account, well

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<v Speaker 1>a lot of money to them, isn't very much in

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<v Speaker 1>the grand scheme of, you know, a company in their bankruptcy.

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<v Speaker 1>It was interesting in seeing Voyager play out earlier because

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<v Speaker 1>it was sort of a case study for f t

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<v Speaker 1>X and for what's happening the same with Celsius. At

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<v Speaker 1>least at first, f t X, you know, bought Voyagers assets,

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<v Speaker 1>so there was some hope that they could bail them

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<v Speaker 1>out then that was up in the air, and now

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<v Speaker 1>with f t X, you know what happens with the

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<v Speaker 1>assets they have left and with the customers money. Really

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<v Speaker 1>is just very up in the air and people are

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<v Speaker 1>waiting to sort of see that play out. But I

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<v Speaker 1>think a lot are losing hope. Can you maybe talk

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<v Speaker 1>about the trust that people put into some of these names.

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<v Speaker 1>So we mentioned already that f t X had before

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<v Speaker 1>the bankruptcy and before everything fell apart, a very good

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<v Speaker 1>standing in the crypto industry and a very good reputation

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<v Speaker 1>for sort of being a solid place to beach reading.

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<v Speaker 1>So talk about what sort of trust people had had

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<v Speaker 1>in these types of places and how that has wrote

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<v Speaker 1>it obviously, because it's very hard harrowing to to read

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<v Speaker 1>stories about you know, families and and a son telling

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<v Speaker 1>his dad to put his x percentage of his life

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<v Speaker 1>savings into some of these platforms or to you know,

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<v Speaker 1>to be yield farming on some of these platforms, and

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<v Speaker 1>then two now us be writing about how that money

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<v Speaker 1>is not likely to be coming back anytime soon. Yeah,

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<v Speaker 1>I think it's hard to overstay just how much trust

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<v Speaker 1>people had in these I think if you think about

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<v Speaker 1>the crypto industry at large, especially you know, at its

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<v Speaker 1>peak and when there was all this fervor around it.

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<v Speaker 1>There are so many small little projects happening that we're

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<v Speaker 1>popping up, you know, all the meme coins and things

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<v Speaker 1>like that, and it's sort of all about the comparison.

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<v Speaker 1>So compared to that kind of thing, you know, you

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<v Speaker 1>think of a platform like FTX, especially with this sort

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<v Speaker 1>of famous founder behind it, who a lot of people

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<v Speaker 1>thought was this prodigy, and especially when you compare that

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<v Speaker 1>to n f t s and dows and little coins

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<v Speaker 1>that some people really really believed in, but a lot

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<v Speaker 1>coins doggy coins, and in comparison to them, you know,

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<v Speaker 1>platform like f TX, like Voyager, seemed very stable. I

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<v Speaker 1>think it's all about the comparison in a lot of ways.

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<v Speaker 1>But I think you're so right. People talk this up

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<v Speaker 1>to their families. They said this is a way to

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<v Speaker 1>make money, and for so long everything was going up

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<v Speaker 1>in every way, and so it wasn't even incorrect in

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<v Speaker 1>their predictions in a lot of ways. You know, as

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<v Speaker 1>long as they got out in time, even with the

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<v Speaker 1>stock market, you put money in, it was going up.

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<v Speaker 1>That was the narrative, and it was the truth years

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<v Speaker 1>exactly so then you know, when this collapse happened, it

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<v Speaker 1>was hard for a lot of people to believe, especially

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<v Speaker 1>if if this is they're one and only experience with investing,

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<v Speaker 1>and they're so into the ecosystem and the Twitter community

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<v Speaker 1>and the rabbit community and all their friends and people

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<v Speaker 1>are talking up crypto. It was really a shock. I

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<v Speaker 1>think when things collapsed. The reason I ask is because

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<v Speaker 1>I think the majority of people would fall into this category,

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<v Speaker 1>but then there's a small sliver of people. And you

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<v Speaker 1>had this great story about this a couple of weeks

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<v Speaker 1>ago post f t X, where you interviewed people who

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<v Speaker 1>basically said, well, I knew there was huge risk involved,

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<v Speaker 1>and I knew there was a possibility that I could

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<v Speaker 1>lose my money, so I'm just going to move on

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<v Speaker 1>with my life, right And I think, you know, I

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<v Speaker 1>talked to financial advisors in addition to regular people, and

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<v Speaker 1>unfortunately that is all as the advice that they give

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<v Speaker 1>to people. If you had money in f t X,

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<v Speaker 1>while there is a possibility you could get it back,

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<v Speaker 1>in terms of planning your finances, moving on with your

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<v Speaker 1>life considering that money gone is the smartest way to

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<v Speaker 1>move forward in terms of planning your finances, which is

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<v Speaker 1>really unfortunate. But I think there's so much interesting psychology

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<v Speaker 1>that goes along with all of this. But in terms

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<v Speaker 1>of moving on, sort of grieving this loss and then

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<v Speaker 1>thinking forward about what you're going to do with your

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<v Speaker 1>money moving forward is something that that some people really

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<v Speaker 1>are doing and that I think a lot of financial

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<v Speaker 1>advisors really endorse and encourage people to do. And although

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<v Speaker 1>we do have a lot of retail investors staying away,

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<v Speaker 1>a lot of institutions stay staying away, there's actually at

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<v Speaker 1>least one company that's sort of making headlines for going

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<v Speaker 1>further into crypto, and that's Fidelity, And I'm hoping you

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<v Speaker 1>can lay out for us what exactly they're doing, because

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<v Speaker 1>they have a ton of crypto offerings and they've been

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<v Speaker 1>involved in some way with the crypto space for a

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<v Speaker 1>number of years. So last November Burgrage firm, Fidelity launched

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<v Speaker 1>a wait list for those interested in crypto trading services,

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<v Speaker 1>planning to offer custody and zero commission trading for bitcoin

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<v Speaker 1>and ether. Fidelity is one of the largest investment managers,

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<v Speaker 1>so they have this name brand that they can really

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<v Speaker 1>draw on, and they're doing a lot of marketing to

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<v Speaker 1>promote this up next more with Bloomberg reporter Claire Balentine

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<v Speaker 1>on the latest in retail crypto trading. We'll be right back.

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<v Speaker 1>I get a lot of emails from Fidelity. I have

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<v Speaker 1>a four one K account with Fidelity Disclosure, but I

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<v Speaker 1>get a lot of emails from them basically saying things

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<v Speaker 1>like five tips for how to manage x y z

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<v Speaker 1>money or account or how to trade x y z.

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<v Speaker 1>So is this something that they're doing when it comes

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<v Speaker 1>to crypto as well. Definitely. Yeah, they are really promoting this,

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<v Speaker 1>I think among their long time customers and offering the

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<v Speaker 1>chance to be you know, the first into this. Talk

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<v Speaker 1>about kind of bad timing in a way with starting

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<v Speaker 1>this last November, but they are continuing to roll it out. Um,

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<v Speaker 1>there's no official start date yet, but it does seem

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<v Speaker 1>like now, especially as we've seen bitcoin rally recently, they're

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<v Speaker 1>moving ahead with this and you know, going to provide

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<v Speaker 1>this opportunity for interested investors. It's possibly the worst timing

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<v Speaker 1>in the universe. And they also had at one point

0:13:41.720 --> 0:13:45.800
<v Speaker 1>last year rolled out a four one K option right right,

0:13:46.200 --> 0:13:48.480
<v Speaker 1>And I think that is appealing to a lot of

0:13:48.480 --> 0:13:51.080
<v Speaker 1>people in a lot of ways. But then you see

0:13:51.080 --> 0:13:53.800
<v Speaker 1>it happened with FDx that caused a major blow to

0:13:53.840 --> 0:13:57.400
<v Speaker 1>all the confidence. But you know, moving forward, I think

0:13:57.400 --> 0:14:00.520
<v Speaker 1>it's something that people do want the ten to do.

0:14:00.760 --> 0:14:03.360
<v Speaker 1>So it's you know, we'll see how much interest there

0:14:03.440 --> 0:14:06.920
<v Speaker 1>is in this Fidelity offering, but it's something that definitely

0:14:06.960 --> 0:14:10.240
<v Speaker 1>can find an audience. It's so fascinating to see people

0:14:10.880 --> 0:14:14.120
<v Speaker 1>pushing forward into the space, and you know, you you

0:14:14.200 --> 0:14:17.960
<v Speaker 1>have to at a certain point. You know, maybe not

0:14:18.080 --> 0:14:21.920
<v Speaker 1>the most ideal timing, but yeah, they are. They're moving

0:14:21.920 --> 0:14:24.840
<v Speaker 1>forward with their crypto offerings, and to be fair, you know,

0:14:25.000 --> 0:14:28.560
<v Speaker 1>it's a platform like Fidelity does sort of give a

0:14:28.560 --> 0:14:32.280
<v Speaker 1>lot of legitimacy to crypto trading because they are kind

0:14:32.280 --> 0:14:37.760
<v Speaker 1>of this trusted investment manager. So they're still providing investors

0:14:37.920 --> 0:14:40.840
<v Speaker 1>an opportunity, which you know makes sense in a lot

0:14:40.920 --> 0:14:44.040
<v Speaker 1>of ways, because I don't think anyone's saying crypto is

0:14:44.080 --> 0:14:48.119
<v Speaker 1>going away. This is a major major setback, but especially

0:14:48.200 --> 0:14:52.920
<v Speaker 1>for Bitcoin, for the well known coins, you know, people

0:14:52.920 --> 0:14:55.880
<v Speaker 1>are still optimistic about it in a lot of ways.

0:14:56.400 --> 0:14:59.400
<v Speaker 1>So yeah, this has the potential to really entice some

0:14:59.480 --> 0:15:02.280
<v Speaker 1>retail invest Sutter's back into the market and something that

0:15:02.320 --> 0:15:04.440
<v Speaker 1>they trust more I think that's going to be the

0:15:04.600 --> 0:15:09.200
<v Speaker 1>key thing moving forward in both crypto industry and the

0:15:09.240 --> 0:15:14.520
<v Speaker 1>more traditional investment management industry. It's trust and providing investors

0:15:14.560 --> 0:15:18.880
<v Speaker 1>with a sense of confidence and security in their trading.

0:15:19.040 --> 0:15:21.440
<v Speaker 1>And it's going to be an uphill battle, I think.

0:15:21.520 --> 0:15:24.080
<v Speaker 1>But you know, a firm like Fidelity that already has

0:15:24.120 --> 0:15:27.080
<v Speaker 1>this sort of trust built in isn't a good position

0:15:27.160 --> 0:15:34.280
<v Speaker 1>to move forward. And just as a side note, we

0:15:34.320 --> 0:15:36.760
<v Speaker 1>did reach out to Fidelity. We were hoping to talk

0:15:36.800 --> 0:15:40.120
<v Speaker 1>to them about these crypto offerings, and they told us

0:15:40.160 --> 0:15:42.320
<v Speaker 1>that they're not yet ready to be talking about their

0:15:42.320 --> 0:15:45.440
<v Speaker 1>crypto offerings at least for another couple of months. When

0:15:45.440 --> 0:15:48.600
<v Speaker 1>you are talking to everyday investors, is this something they're

0:15:48.600 --> 0:15:51.480
<v Speaker 1>telling you they would like to be seeing from their

0:15:51.520 --> 0:15:55.680
<v Speaker 1>brokerage accounts where they're you know, offering up these new

0:15:55.920 --> 0:15:59.560
<v Speaker 1>crypto trading options or for one K options. Is that

0:15:59.680 --> 0:16:03.720
<v Speaker 1>something people actually want? That's a great question. I think

0:16:03.760 --> 0:16:06.840
<v Speaker 1>for so long, people think of it as separate. People

0:16:06.880 --> 0:16:10.440
<v Speaker 1>think of crypto as not something you do in your

0:16:10.720 --> 0:16:13.240
<v Speaker 1>Vanguard account or something. They think of it as like

0:16:13.280 --> 0:16:18.560
<v Speaker 1>this totally separate entity. I do think that people want

0:16:18.600 --> 0:16:21.800
<v Speaker 1>a way to invest in crypto for their retirement. I

0:16:21.840 --> 0:16:24.680
<v Speaker 1>have heard that whether or not that's a little bit

0:16:24.760 --> 0:16:29.040
<v Speaker 1>or a lot varies, but I think people want options.

0:16:29.160 --> 0:16:32.680
<v Speaker 1>People want the ability to do what they believe in,

0:16:32.840 --> 0:16:37.080
<v Speaker 1>especially for tax deferred accounts, is really appealing to them.

0:16:37.600 --> 0:16:40.920
<v Speaker 1>So I think there definitely is a market for this.

0:16:41.640 --> 0:16:43.800
<v Speaker 1>I don't think anyone is saying put all of your

0:16:43.840 --> 0:16:48.000
<v Speaker 1>four one K and crypto, but to have this opportunity,

0:16:48.120 --> 0:16:50.560
<v Speaker 1>I think is something investors do want to at least

0:16:50.600 --> 0:16:54.640
<v Speaker 1>have the option. Claire, I heard you have of your

0:16:54.640 --> 0:16:58.960
<v Speaker 1>four one K and cryptocurrencies, all of it. My one time,

0:16:59.000 --> 0:17:00.920
<v Speaker 1>I made the terrible mist ache of looking up my

0:17:01.640 --> 0:17:05.840
<v Speaker 1>target retirement date with crypto, with crypto, with my crypto,

0:17:06.040 --> 0:17:09.399
<v Speaker 1>with my career, and there's nothing that's more discouraging than

0:17:09.440 --> 0:17:12.520
<v Speaker 1>realizing that you have to work another forty years before

0:17:12.560 --> 0:17:14.760
<v Speaker 1>you get four hundred years. Four hundred years if you

0:17:14.800 --> 0:17:18.960
<v Speaker 1>invest in crypto. Maybe thanks so much for joining us.

0:17:19.000 --> 0:17:22.960
<v Speaker 1>Things that was Bloomberg reporter Claire Valentine. You can find

0:17:23.000 --> 0:17:25.280
<v Speaker 1>more of her work on the Bloomberg terminal and on

0:17:25.359 --> 0:17:27.960
<v Speaker 1>Bloomberg dot com. For more, be sure to check out

0:17:27.960 --> 0:17:31.640
<v Speaker 1>our twice weekly newsletter, Bloomberg Crypto We'll see you next time.

0:17:36.119 --> 0:17:39.280
<v Speaker 1>This is Bloomberg Crypto, a daily podcast from Bloomberg and

0:17:39.320 --> 0:17:42.280
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0:17:42.520 --> 0:17:45.639
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0:17:45.680 --> 0:17:49.240
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0:17:49.240 --> 0:17:52.240
<v Speaker 1>suggestions for the show to Crypto at Bloomberg dot net.

0:17:55.480 --> 0:17:59.160
<v Speaker 1>The supervising producer of Bloomberg Crypto is Vicky Vergolina. Our

0:17:59.200 --> 0:18:03.040
<v Speaker 1>senior producer is Janet Babin. Our producers are Mohammed Farouk

0:18:03.080 --> 0:18:06.480
<v Speaker 1>and Sharon Barriro. Our associate producers are Ty Butler and

0:18:06.560 --> 0:18:10.840
<v Speaker 1>Moses on Them. Desta wonder At is our engineer. Original

0:18:10.920 --> 0:18:15.720
<v Speaker 1>music by Leo Sidrn. I'm Stacy Mariashmal. We'll be back

0:18:15.760 --> 0:18:16.080
<v Speaker 1>tomorrow