Despite the prolonged bear market in cryptocurrencies, major financial institutions like Nasdaq and Fidelity Investments are accelerating their entry into crypto services, responding to growing demand from a new generation of investors.
Rising Institutional Interest Amid Crypto Market Slump
The U.S. Federal Reserve’s aggressive interest rate hikes have exacerbated the crypto market downturn, with Bitcoin dropping below $20,000 in September 2022—a 60% year-to-date decline. However, this hasn’t deterred traditional financial giants from expanding into digital assets.
Nasdaq’s Crypto Custody Play
Nasdaq announced plans to launch institutional cryptocurrency custody services, initially supporting Bitcoin and Ethereum. Key developments:
- Hired Ira Auerbach (ex-Gemini) to lead its new Digital Assets Division, targeting 40 hires by year-end.
- Seeking regulatory approval from New York’s DFS to compete with crypto-native firms (e.g., Coinbase) and traditional players like BNY Mellon.
- Positioning itself as a trusted intermediary for institutions, leveraging its market infrastructure expertise.
"Custody is the foundation for all other services we plan to build," — Ira Auerbach, Nasdaq Digital Assets.
Fidelity’s Retail Bitcoin Expansion
Fidelity Investments, managing $4.2 trillion in assets, is exploring retail Bitcoin trading via its brokerage platform:
- Already offers Bitcoin trading for institutions (since 2018) and 401(k) Bitcoin exposure (April 2022).
- Launched crypto/Web3-focused ETFs and filed for a spot Bitcoin ETF with the SEC.
- Pioneered internal Bitcoin mining as early as 2014.
👉 Why institutional custody matters for crypto’s future
FAQs: Institutional Crypto Adoption
1. Why are traditional firms entering crypto now?
With 35% of U.S. millennials holding crypto, institutions see demand for regulated, familiar investment channels.
2. How does Nasdaq’s custody differ from Coinbase’s?
Nasdaq emphasizes institutional-grade compliance and integration with legacy financial systems.
3. Will Fidelity’s move boost Bitcoin’s price?
While not directly price-driving, institutional participation increases long-term market stability.
The Road Ahead
As regulatory frameworks evolve, expect more legacy players to bridge traditional finance and digital assets.
👉 Explore institutional crypto strategies
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