Fidelity obtains a trust license from the New York Department of Financial Services to offer Bitcoin custody service to New York residents. Additionally, Fidelity also received the license to operate a trading platform on which New York’s institutional investors can securely purchase, sell, store or transfer Bitcoin.

“The custody and trade execution services that we provide are essential building blocks for institutional investors’ continued adoption of digital assets,” said Michael O’Reilly, the chief operating officer for Fidelity Digital Assets.

Fidelity playing a leading role in supporting the maturation of the Bitcoin ecosystem alongside Bakkt:

Bitcoin price this year has risen from $3500 to $14,000. A much higher yield than any other investment class. However, institutional investors have maintained their distance with the world’s most popular digital asset. Many hoped that Wall Street’s nascent appetite for investing in Bitcoin will grow in 2019. However, the Bitcoin price started to drop in Aug indicating otherwise.

Lack of enterprise-grade custody offering has been one of the reasons for lack of interest from institutional investors. Additionally, increasing hacks in crypto exchanges have kept institutional investors stay away from the loosely regulated space.

Now with the regulators’ approval, Fidelity hopes to lure cautious institutional investors who prefer to do business with licensed operators and expand its client base.

Growing competition for providing enterprise-grade service:

Earlier this month, Bakkt also received a license from the New York Department of Financial Services (NYDFS) to offer its custody service to all institutional clients around the world. Among the first to choose Bakkt as their preferred digital asset custodian were Pantera Capital, Galaxy Digital, and Tagomi.

Fidelity sets itself apart from its competitors. By pairing its custody service with a trade execution platform, it provides a one-stop-shop service to buy, sell and securely store the Bitcoin for its institutional clients.

Interestingly, Galaxy Digital Holdings one of Bakkt’s clients earlier today announced its selection of Fidelity along with Bakkt to store the Bitcoin for its two new funds – Galaxy Bitcoin Fund and the Galaxy Institutional Bitcoin Fund.