Embracing digital assets, Fidelity buys stake in BTC mining company Marathon through multiple funds

Foreign media reported that Fidelity Investments Inc. recently purchased a 7.4% stake in Bitcoin mining company Marathon Digital Holdings for approximately US$20 million through four index funds.

The four index funds include the Fidelity Extended Market Index Fund (FSMAX), the Fidelity Nasdaq Composite Index Fund (FNCFX), the Fidelity Total Market Index Fund (FSKAX) and the Fidelity Series Total Market Index Fund (FCFMX). The total market value of these funds is reportedly $170 billion. Although each fund holds a small percentage of Marathon shares, many of these index funds are popular with retirement accounts.

Recent acquisitions point to a growing trend among institutional and individual investors to invest in the cryptocurrency industry through traditional equity or debt securities. It makes sense for Fidelity to move in this direction, as it was one of the first financial institutions to embrace cryptocurrencies and digital assets. In fact, many years ago, executives at the company mined Bitcoin in their offices to experiment with the technology.

Then in 2018, it launched Fidelity Digital Assets as a standalone business to provide corporate-quality custody and trade execution for digital assets and cryptocurrencies such as Bitcoin to sophisticated institutional investors such as hedge funds, market intermediaries and family offices. The entity currently serves more than 100 clients. The company is arguably one of the first mainstream financial services providers to adopt cryptocurrencies, which are increasingly attracting established financial institutions.

After the disclosure of Fidelity's purchase of Marathon shares through four index funds, Marathon CEO Fred Thiel said in an interview that we are super excited about institutional ownership. If you look at the changes from last year to this year, and even in the past two quarters, the growth in institutional holdings in our stocks has been amazing. As more and more traditional financial institutions flock to digital assets and cryptocurrencies, Thiel remains optimistic about the role of Bitcoin in the future. "As Bitcoin penetrates into mainstream financial markets, we are excited to see all the applications that will be launched with Bitcoin, and the expansion of Bitcoin."

When asked to comment on the stock purchase, a Fidelity spokesperson responded: "As a matter of practice, we do not comment on individual securities. To protect our shareholders, we do not disclose investment intentions."

It is worth mentioning that according to a new survey by Fidelity Digital Assets, the number of institutional investors (wealth management institutions, foundations, etc.) that own crypto assets has increased dramatically and will continue to grow in the future. 70% of institutional investors intend to purchase or invest in digital assets in the near future, and more than 90% of them plan to do so by 2026. The survey was conducted blindly and solicited the opinions of more than 1,100 institutional investors, roughly distributed in the United States, Europe and Asia. It defines crypto ownership as directly owning digital assets or investing in companies in the crypto field.

In July of this year, Fidelity also gradually expanded its actions in the encryption field. Fidelity Digital Assets plans to start providing services for Ethereum and other cryptocurrencies. Tom Jessop, head of Fidelity Digital Assets, said that we have seen people's increasing interest in Ethereum, so we hope to get ahead of this demand.

In addition, as institutional investors' demand for cryptocurrency services remains strong, Fidelity Digital Assets, a subsidiary of Fidelity, plans to increase its staff by about 70%. Tom Jessop, president of Fidelity Digital Assets, said in an interview that the company plans to add about 100 technical and operational staff in Dublin, Boston and Salt Lake City. He said these employees will help the company develop new products and expand into cryptocurrencies beyond Bitcoin. (Part of the news is compiled from forbes)