Fidelity to Challenge Robinhood By Offering Commission-Free Crypto Trading to Retail Investors

On Thursday, November 3, Fidelity Investments made an important announcement of launching a commission-free crypto trading app for all retail investors. This is for the first time that Fidelity is offering its crypto services to retail players.

So far, the financial giant has been working on introducing several products for institutional players. Dubbed as Fidelity Crypto, the service will allow investors to buy and sell Bitcoin (BTC) and Ethereum (ETH) and will offer custodial services through its crypto subsidiary Fidelity Digital Assets.

Since this service is for retail players, the minimum balance they need to maintain is only $1. In a statement to CNBC, Fidelity said: “Where our customers invest matters more than ever. A meaningful portion of Fidelity customers are already interested in and own crypto. We are providing them with tools to support their choice, so they can benefit from Fidelity’s education, research, and technology.”

Although the trades on Fidelity Crypto will be commission-free, the financial giant said that they would factor in 1% spread into every trade.

With its latest retail services, Fidelity will directly challenge the like of Robinhood and Binance.US offering commission-free trading in crypto. Thus, there’s high probability that Fidelity Crypto will be eating into their market share.

Last week on October 27, Fidelity Investments shared another report stating that institutional acceptance for cryptocurrencies have increased this year despite the strong market correction.

As per the survey conducted by Fidelity Digital Assets, a staggering 60% of institutional investors invested in the crypto market during the first-half of 2022. They conducted the survey across 1,000 institutional investors including financial advisors and hedge fund managers across Europe, US, and Asia. The study finds that Bitcoin and Ethereum remains the most-popular investment option among institutional players.

Tom Jessop, president of Fidelity Digital Assets said: “While the markets have faced headwinds in recent months, we believe that digital assets fundamentals remain strong and that the institutionalization of the market over the past several years has positioned it to weather recent events”.

However, these investment giants continued to express concerns over security, price volatility, and other risks related to market manipulation.

The interesting thing with launching Fidelity crypto is that it comes at a time when the crypto markets are facing the risks of macro headwinds and other market uncertainties. If the U.S. slips into recession next year, it would dampen retail sentiments for crypto