This post will provide a detailed overview of the Fidelity Crypto account. But first, our disclosure:
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What Is Fidelity Crypto?
Fidelity Crypto is a cryptocurrency trading platform offered by Fidelity Investments, one of the largest investment brokerage companies in the world. Fidelity Crypto allows users to buy, sell, and trade popular cryptocurrencies, including Bitcoin. It is Fidelity’s alternative to other popular crypto trading platforms such as Coinbase and Robinhood.
By writing this post, I am not trying to convince anyone to open a Fidelity Crypto account or to invest in crypto. Instead, I aim to provide an overview of Fidelity Crypto based on firsthand experience. It is up to you to decide what to do with that information. I’ll cover everything from how easy it was to set up an account to the features and tools it offers.
Are you ready to explore Fidelity Crypto? If so, let’s dive right in and answer the question: Is Fidelity Crypto any good?
Is Fidelity Crypto Any Good?
Whether someone should open a Fidelity Crypto account depends mainly on their experience with trading crypto and their reasons for investing in crypto in the first place.
A diehard Bitcoiner will dismiss Fidelity Crypto with their mantra, “Not your keys, not your coins.” That’s not entirely fair. Buying Bitcoin is easy. Storing it is the hard part. Lose your keys, lose your Bitcoin! So, what one investor sees as a downside of Fidelity Crypto, another may view as an advantage.
Suppose you are an experienced crypto trader who wants complete control over your crypto, wants to transact with it, and wants to trade various other cryptocurrencies. In that case, Fidelity Crypto may not be your best option. You might be better off using another crypto trading platform or exchange.
However, Fidelity Crypto might be a suitable option if you lack expertise in cryptocurrencies, primarily want to buy and hold crypto, and prefer not to handle the responsibility of storing private keys. I fell into this camp and chose Fidelity Crypto to buy and hold Bitcoin.
Fidelity Crypto Does Not Mitigate Crypto’s Risk
Regardless of your choice, Fidelity Crypto cannot protect you from crypto’s inherent volatility—no crypto trading platform can. Understanding this risk is crucial as you make your crypto investment decisions.
Cryptocurrencies, such as Bitcoin, are extremely volatile and carry significant risks. Their values can have huge swings, increasing over 100% in one year and then declining by over 80% the next. Fidelity Crypto or any other crypto investment platform cannot protect you or anyone else from these swings if you invest in cryptocurrencies.
So, if you are considering investing in crypto or have already done so, understand no platform on the planet can mitigate its risks. There is a real chance of losing all your money investing in cryptocurrencies. You can see your entire crypto investment vanish in the blink of an eye. So invest at your own risk!
Fidelity Crypto: Experience Matters
While Fidelity Crypto cannot shield investors from the inherent risks of cryptocurrency investing, it does provide one significant advantage: Experience.
It might come as a surprise, but unlike other big traditional firms, Fidelity was an early adopter of Bitcoin and has been bullish on it ever since. Fidelity has been mining Bitcoin and developing blockchain solutions since 2014. The same is not true of other firms approaching Fidelity’s size and history.
Under Larry Fink, BlackRock was slow to embrace Bitcoin, calling it “an index of money laundering.” It wasn’t until 2022 that his view on cryptocurrencies changed, leading BlackRock to launch a spot Bitcoin ETF in 2024. Then there is the mega-bank JP Morgan Chase and its raw hatred of Bitcoin.
JPMorgan Chase’s CEO Jamie Dimon has referred to Bitcoin as “worthless,” describing it as a “pet rock” and a “hyped-up fraud.” He even threatened to “fire in a second” anyone caught trading Bitcoin.
What was Fidelity doing while JP Morgan Chase raged against Bitcoin and Larry Fink waffled on it? Fidelity was busy embracing Bitcoin with open arms.
While Larry Fink labeled Bitcoin “an index of money laundering,” Fidelity was mining it. As Jamie Dimon proclaimed Bitcoin “worthless,” Fidelity became the first traditional financial firm to provide crypto custody services for institutional investors. And while Dimon threatened to fire anyone trading Bitcoin, Fidelity allowed employees to include it in their 401(k) accounts.
The commitment and expertise of Fidelity in the crypto market cannot be overstated. Their dedication led to the development of a new business unit, Fidelity Digital Assets, and their in-house crypto trading platform, Fidelity Crypto. This commitment to crypto should instill a strong sense of security and trust in their services.
Is Fidelity Crypto Available Where I Live?
Fidelity Crypto is available only to U.S. citizens over 18 who reside in a state where Fidelity has received approval to offer its services. As of this writing, residents of 38 states can open a Fidelity Crypto account.
If you live in one of the 12 states listed below or D.C., you are out of luck, as Fidelity Crypto is not currently available in these states:
Alaska, Arizona, Connecticut, Georgia, Hawaii, Louisiana, Maryland, New Mexico, North Carolina, Rhode Island, West Virginia, Minnesota, and the District of Columbia.
I think it is only a matter of time before Fidelity Crypto is available in all states. Keep an eye on Fidelity Crypto for updates on approval status.
You can open a Fidelity Crypto account if you meet the eligibility requirements and live in one of the 38 approved states.
How Hard Is It To Open A Fidelity Crypto Account?
Opening a Fidelity Crypto account is quick and straightforward, especially if you already have a Fidelity brokerage account. The entire process can be completed in a few minutes, giving you the confidence to start your crypto journey with ease.
You need a Fidelity brokerage account to fund your crypto account, as Fidelity does not permit direct funding of the Fidelity Crypto account. You cannot link external banks to the account and cannot use retirement accounts like IRAs. This policy is in place to comply with regulations and to make investors think before investing in high-risk cryptocurrencies.
If you don’t have a Fidelity brokerage account, you must open one up before opening a Fidelity Crypto account. Again, this is a simple and quick process.
Funding Fidelity Crypto
To fund a Fidelity Crypto account, a person must first transfer funds to their brokerage account. Then, they can transfer those funds to their Fidelity Crypto account. This double transfer of funds is a minor annoyance and is no big deal if you plan for it.
It’s important to note that Fidelity does not permit the purchase of cryptocurrency using unsettled cash, unlike it does with stocks. There is typically a one-day waiting period from when an investor makes the transfer until the cash is available to buy crypto, like Bitcoin. Once the cash has settled in the brokerage account, you can transfer it to Fidelity Crypto for immediate use.
Key Features Of Fidelity Crypto
So far, we’ve covered the basics of the Fidelity Crypto account. Now, let’s take a closer look at its key features. Understanding these features is important because they will help potential users determine if opening a Fidelity Crypto account is right for them. Let’s begin by exploring the cryptocurrencies available for trading on Fidelity Crypto!
Available Cryptocurrencies for Trade
As of this writing, you can only trade three cryptocurrencies on Fidelity Crypto: Bitcoin, Ethereum (Ether), and Litecoin.
Based on their presentations, Fidelity continues to evaluate adding more cryptocurrencies. So, I would expect future additions to their crypto lineup, but for now, you can trade the two largest cryptocurrencies (Bitcoin and Ether) and Litecoin.
The lack of crypto options might turn away more experienced crypto traders looking for a wider selection. In this case, experienced crypto traders might benefit more from robust trading platforms like Coinbase or Binance.
Fidelity Crypto 23-Hour Trading
You can trade with Fidelity Crypto for 23 hours a day, from 1 a.m. ET until midnight, seven days a week. For most crypto traders, this schedule won’t be an issue. However, some may find it frustrating since most cryptocurrencies, including Bitcoin, can be traded 24 hours a day, seven days a week.
For example, if you live in New York City and notice bitcoin skyrocketing at 12:30 a.m., you must wait thirty minutes until 1 a.m. before you can get in on the action. Most people won’t be awake during this one-hour blackout period unless they are on the West Coast. As for me, I hope I’m in bed, enjoying sweet Bitcoin dreams. If not, then I might have other issues to deal with!
Crypto Starting At $1
You can start trading on Fidelity Crypto with just $1—it’s that simple! There’s no need to spend a fortune or part with your vintage record collection. With a minimum investment of only one dollar, you can trade Bitcoin, Ethereum, and Litecoin. This low entry point makes it easier to implement dollar-cost averaging when investing in cryptocurrencies like Bitcoin.
Fidelity Crypto Fees
Trades are commission-free on Fidelity Crypto, but a 1% spread is included in each trade execution price. The benefit of the 1% spread is that, unlike crypto ETFs, there are no ongoing fees or expense ratios. You only pay when you trade. Let’s see how this works.
Imagine you buy $1,000 worth of Bitcoin trading at $90,000. Fidelity Crypto applies a 1% spread to the price, meaning you would purchase Bitcoin at $90,900. As a result, the trade costs you $10. Your account will show the full $1,000 investment in Bitcoin, but you purchased it at a price 1% above the market price. The same situation applies when you sell your Bitcoin.
Imagine you want to sell $1,000 worth of Bitcoin at $90,000. Fidelity Crypto applies the same 1% spread to the price, but this time, it reduces the execution price by 1%. Due to the 1% spread, you won’t sell your Bitcoin at $90,000. Instead, you sell it for $89,100, or 1% below the market price. As a result, the trade still costs you $10.
Ease Of Trading Crypto
With Fidelity Crypto, buying and selling Bitcoin, Ether, and Litecoin is as easy as clicking a few buttons. It works the same way as buying and selling stocks on the platform. It didn’t take me more than one minute to make my first purchase of Bitcoin. It’s as simple as it comes.
Omnibus Wallets
Crypto wallets are where you store your private keys. There are two main types of crypto wallets: hot wallets and cold wallets.
Cold wallets are stored offline for security, while hot wallets are connected to the internet and are used for temporary storage to send and receive cryptocurrencies like Bitcoin. In general, you keep cryptocurrency in cold storage and transfer it to a hot wallet when you’re ready to transact.
If you self-custody your crypto, you have control over your wallets and private keys. You can hold your private keys in cold storage on a thumb drive or special device. You can also write them down on paper but I do not recommend that. Some people engrave the private keys on metal. You can then store the private keys anywhere—in a fire safe or your underwear drawer.
However, you do not hold the private keys when you buy crypto with Fidelity. Instead, they use omnibus wallets to store your crypto. In an omnibus wallet, crypto is commingled without distinguishing individual ownership. Fidelity holds the private keys and records individual ownership in your Fidelity Crypto account. Let’s look at an example of how this works.
Imagine you purchase 4 bitcoins, while someone else buys 6 bitcoins for a total of 10 bitcoins. All 10 bitcoins go into the same omnibus wallet, but your account will only reflect your 4 bitcoins. When you sell your 4 bitcoins, they are drawn from the omnibus wallet; they may not be the exact same 4 bitcoins you bought, but they will hold the same value.
For many crypto investors, particularly Bitcoin enthusiasts, omnibus storage is a deal breaker. Remember the phrase, “Not your keys, not your coins.” However, as we will see next, omnibus storage with Fidelity Crypto does have its advantages.
Secure Cold Storage and Privacy
Fidelity stores a small portion of crypto assets in hot wallets to meet customers’ trading needs. The rest is stored offline in secure cold storage. What does this secure cold storage look like?
According to Fidelity’s website, cryptocurrency assets are stored offline in secure facilities that block radio frequencies and have TEMPEST shielding. This shielding prevents electromagnetic emissions from escaping and being intercepted by devices spying on the outside. All facilities and systems have redundant backups and feature 24/7 alarms, security measures, and remote monitoring.
Fidelity’s website states that there is no single point of failure. Every security measure involves a multistep process across multiple locations. Furthermore, customers’ personal holdings and transactions are kept off-chain to ensure privacy.
If you self-custody your crypto, you are responsible for securing your private keys. If you lose them or have them stolen, they are gone forever. Millions of bitcoins have been lost forever in this manner.
Whether self-custody outweighs Fidelity Crypto’s omnibus wallet storage and security is a personal choice. You must know thyself. For someone like me, Fidelity Crypto’s level of security and storage outweigh the benefits of self-custody of my crypto. It gives me peace of mind, as I am more concerned with losing private keys than holding them myself.
If self-custody is very important to you, take the time to learn as much as possible about it. Numerous companies offer services and multi-signature wallets to help you maintain self-custody. Properly storing your private keys is crucial; otherwise, you could join the millions who have lost their cryptocurrency and crypto investment forever.
Can’t use Bitcoin For Transactions . . . Yet
You can buy and sell crypto on Fidelity Crypto, but you cannot use it for transactions. In other words, you can’t spend your bitcoins or benefit from Litecoin’s faster transaction times. For hardcore crypto users and Bitcoiners, the inability to transact is a bridge too far.
As a result, Fidelity Crypto is better suited for those who want to take a speculative position on the price of these cryptocurrencies. It serves investors looking to purchase crypto as a store of value rather than for transactional purposes. However, Fidelity is not resting on its laurels.
I sat through several Fidelity Crypto presentations, and the inability of users to transact with their crypto is a hot-button item. Fidelity stresses this is high on their to-do list. So, although transacting with your Bitcoin, Litecoin, or Ethereum is not available today, it may be in the future.
Conclusion: Is Fidelity Crypto Any Good?
Fidelity Crypto presents a compelling opportunity for crypto investors, though its appeal varies based on individual needs. If you’re new to cryptocurrencies and prefer a straightforward way to buy and hold assets like Bitcoin without the complexities of managing private keys, Fidelity Crypto could be an ideal choice. Its backing by Fidelity Investments—a trusted name in finance—adds an extra layer of security and reliability.
However, Fidelity Crypto may not be for you if you’re a seasoned crypto trader seeking a platform that offers a wide range of cryptocurrencies and more advanced features. The bottom line is that you must assess what you need from a crypto trading platform and choose accordingly.
Remember that investing in cryptocurrencies carries risks. No platform, including Fidelity Crypto, can shield you from market and crypto volatility. It’s vital to approach your crypto investments with a clear understanding of the potential for significant gains and losses. Therefore, consider your financial situation and risk tolerance before diving into the crypto market.
In the end, it’s your choice. It’s totally up to you whether you want to invest in crypto and which platform to choose. You must decide based on your comfort level with cryptocurrencies and your overall investment strategy. As the crypto landscape evolves, staying informed and making decisions aligned with your financial goals will be key to navigating this exciting yet unpredictable market.
Learn More
The world of crypto is fast-paced and always evolving. Staying up-to-date with the latest crypto news is paramount if you invest in crypto. It is also critical to understand how cryptocurrencies and blockchains work. Investing in the hype without understanding the underlying technology is a recipe for disaster.
Below is a short list of my favorite crypto books, podcasts, and YouTube Channels. Happy learning!
Anthony Pompliano
Anthony Pompliano is my go-to source of information on Bitcoin and cryptocurrencies. He hosts The Pomp Podcast and the YouTube channel Anthony Pompliano. Anthony interviews the biggest names in crypto and investing; his insights are second to none. This is my favorite podcast to listen to, and I can’t wait for new episodes to drop!
Anthony Pompliano is also the author of the book “How To Live An Extraordinary Life.”
Nathalie Brunell
Nathalie Brunell hosts the Coin Stories Podcast and has her own YouTube channel. Like Anthony Pompliano, she interviews some of the biggest names in crypto and Bitcoin. You will definitely leave each episode with more knowledge than you had when you started.
The Bitcoin Standard
No list on Bitcoin would be complete without “The Bitcoin Standard” by Saifedean Ammous. It is a must-read for anyone interested in Bitcoin. The Bitcoin Standard completely changed my understanding and opinion of Bitcoin. Michael Saylor, the Chairman of MicroStrategy, credits this book with having the most impact on their way of thinking and investing in Bitcoin.
Saylor transformed his multi-billion dollar company to focus on Bitcoin, completely overhauling its business strategy. As a result, MicroStrategy is now the largest corporate holder of Bitcoin, owning over 1% of all Bitcoin in circulation. Any book that can have such a significant impact is worth reading!
