Fidelity’s crypto strategy has paid off

If you ask someone to describe Fidelity Investments, they will probably use words like “big, boring, and safe.” That’s an accurate description of the Boston-based financial giant, which manages more than $4 trillion and is overseen by CEO Abby Johnson, granddaughter of Fidelity’s founder. Johnson is a steady hand who has kept the firm free of drama, which is why it’s surprising to realize she has also been one of crypto’s biggest champions for a decade.

This occurred to me while reading a WSJ profile of the self-described “Fidelity mafia”—a group of crypto executives who got their start at the asset manager. Some went on to take senior roles at firms like Galaxy Digital and mining giant Foundry, while another is a founding partner at VC firm Castle Island Ventures. They owe their current positions in part to Fidelity’s blue-chip name, but also to the experience they gained as a result of Johnson’s decision to lean into Bitcoin back in 2014—a time when traditional finance wanted nothing to do with crypto.

I recall my surprise upon speaking to a Fidelity executive in 2016 and learning the firm was not just exploring crypto, but had been actively mining Bitcoin and Ethereum. Both then and now, Fidelity does not like to talk up its crypto initiatives—a sensible policy given the bad press and regulatory hostility crypto has long attracted. And while some might suspect the company’s crypto push took place despite Johnson, and not because of her, the Journal piece makes clear she has been a driving force. This included the CEO overruling pushback from Fidelity’s finance and security teams over the purchase of Bitcoin mining rigs in 2014.

More recently, Johnson has green-lit measures such as allowing Fidelity customers to add Bitcoin to their retirement portfolio despite criticism from the Labor Department. Even the recent scandals that have engulfed the crypto industry haven’t shaken the CEO’s view of digital assets. As the Journal notes:

“Today, crypto continues to be viewed as a long-term growth opportunity at Fidelity. The company stores billions of dollars in customer crypto assets, while the headcount in its crypto unit has steadily risen to more than 600 from just a few dozen in 2018.”

All of this puts Fidelity, which appeared on Fortune’s inaugural FORTUNE CRYPTO 40 list, in a position to ride the next crypto upturn, which is likely to be driven in part by the approval of Bitcoin spot ETFs—which the company has already sought approval to offer. It’s a testament to Johnson’s leadership that she appreciated the significance of crypto assets before her peers in traditional finance, and had the courage to pursue a strategy that has paid off handsomely.

Jeff John Roberts
[email protected]
@jeffjohnroberts

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