Fidelity Digital Assets (FDAS) is a young crypto trading firm of a financial-services powerhouse. Its President, Tom Jessop, says the company is expected to sign up its first exchange before the year ends. FDAS is a brokerage that provides the best deals to its investors in trading Bitcoin from different sources.

According to Jessop, the number of liquidity providers is expected to double between the platform’s launch date and the end of the year. He claims their main focus is on over-the-counter (OTC) liquidity providers. The company is also hoping to connect with their first exchange before the year ends.

This development will enable FDAS gain access to a larger market as well as obtain liquidity for smaller trades. Exchanges primarily provide services to retail traders and smaller institutions whiles OTC desks trade with much larger institutions and ‘whale’ investors.

According to John Todaro, director of research at Tradeblock, a provider of institutional trading tools, an exchange has more small order activity and is more comprehensive. OTC desk on the other hand relies on relationship driven activity and used for larger block trades.

There are several firms which are trying their best to bridge the gap between Wall Street and crypto. One of them is FDAS which is a unit of Fidelity Investments. Another one is Bakkt, the Bitcoin futures exchange launched by Intercontinental Exchange.

FDAS also found out that OTC desks are much easier to establish than exchanges. A spokesperson of FDAS stated that they apply high standard of counterparty evaluation which involves a rigorous risk management and onboarding process. She added they’ve been able to apply these processes to OTC desks with post-trade settlements more readily than with exchanges.

FDAS won a trust charter from New York’s Department of Financial Services earlier this week. The charter allows the company to involve New York clients and increases the credibility of the company especially with clients looking for a licensed company to work with.

Galaxy Digital announced recently that it was using FDAS and Bakkt as custody for its two Bitcoin funds. Meanwhile, Jessop refused to mention the company’s New York clients.

Jessop claims FDAS has a diverse client base which includes hedge funds, family offices, an investment advisor and a small U.S.-based pension fund. He said the company was overwhelmed by the effort people put in place during the year to understand the asset class.

After onboarding the New York clients, FDAS also intends to onboard new assets, develop its trading capabilities, scale its business and pursue licenses in other states.

Featured image courtesy of Shutterstock