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Crypto market rallies as Fidelity considers bitcoin trading

·3-min read
Bitcoin cryptocurrency graphic illustration
Bitcoin cryptocurrency graphic illustration

Crypto markets rose on Tuesday as investment company and one of he world's biggest asset managers Fidelity (FNF) revealed it is considering bitcoin trading for retail investors.

Bitcoin (BTC-USD) was up 13% over the last seven days to stand at $22,338 (£19,075).

The second largest cryptocurrency by market capitalisation, ethereum (ETH-USD), was up 6% in the last week to $1,705, as of the time of writing.

Fidelity considers offering bitcoin trading for retail investors

One of the world's biggest asset managers, with $5tn in assets and 34 million individual investors, is considering giving its clients the ability to buy bitcoin directly.

Fidelity provides investment management services including mutual funds, pension management and fund platforms to private and institutional investors.

Fidelity customers may soon be able to buy bitcoin via the company’s brokerage platform, according to The Wall Street Journal.

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Galaxy Digital CEO Mike Novogratz said at New York’s SALT forum: "A bird told me, a little bird in my ear, told me Fidelity is going to shift its retail customers into crypto soon enough.

"I hope that bird is right."

Novogratz said the move by Fidelity as well as BlackRock's (BLK) recent spot bitcoin private trust were part of a "constant march of institutional adoption of bitcoin".

Federal Reserve Board Chairman Jerome Powell attends a news conference following a two-day meeting of the Federal Open Market Committee (FOMC) in Washington, U.S., July 27, 2022. REUTERS/Elizabeth Frantz
Federal Reserve chairman Jerome Powell. Photo: Elizabeth Frantz/Reuters

US inflation data released on Tuesday

US Consumer Price Index (CPI) data for the month of August is scheduled for release on Tuesday.

Analysts have forecast prices moderating as travel and fuel costs fall. Analysts surveyed by Dow Jones expect headline CPI to have declined by 0.1% for all items in the month of August.

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If this is the outcome, the global cryptocurrency market cap could increase above its current value of $1.1tn due to the anticipation of less hawkish moves on monetary policy by the Federal Reserve.

If headline inflation reduces, after a flat reading in July, the cryptocurrency market could react again with a rally.

The CPI report is seen as a key guiding factor for next week’s Federal Reserve rate decision and could influence the Fed to become less aggressive with their restrictive monetary policy of subsequent interest rate hikes.

The long-term expectation is that the Fed’s terminal rate could reach 4% by the end of the year inching higher over the coming months.

MIAMI, FLORIDA - JUNE 04:  MicroStrategy CEO Michael Saylor  speaks at the Bitcoin 2021 Convention, a crypto-currency conference held at the Mana Convention Center in Wynwood on June 04, 2021 in Miami, Florida. The crypto conference is expected to draw 50,000 people and runs from Friday, June 4 through June 6th.  (Photo by Joe Raedle/Getty Images)
MicroStrategy CEO Michael Saylor. Photo: Joe Raedle/Getty

Michael Saylor's Microstrategy bitcoin buy

MicroStrategy (MSTR), a US-based company that provides business intelligence, mobile software, and cloud-based services, has filed with the US Securities and Exchange Commission (SEC) to sell up to $500m of stock to fund bitcoin purchases.

The move shows that MicroStrategy's executive chairman Michael Saylor isn't slacking on his conviction to turn his software development company into one of the world's major bitcoin holders.

Bitcoin pioneer Max Keiser tweeted in June that MicroStrategy has board clearance to make a $500m bitcoin buy.

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Keiser added that Saylor is currently “chilling on his yacht” and will make a decision on whether to go ahead soon.

The deal was confirmed when the details of the SEC filing became public on Friday.

The shares will be sold through Cowen & Co and BTIG LLC, according to the filing, though no date was provided for any potential sales.

However, the firm added that it intends to retain all future earnings to purchase additional bitcoin and for the development of the software business.

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