Fidelity crypto trading

[Pekelo]

This Fidelity product is for the person who "wants crypto" in the absolute easiest way possible but doesn't want to do any more research:

• No need to set up or understand wallets, or even exchanges
• Done from within their existing apps
• Only 2 coin options (initially), BTC or ETH

https://www.kitco.com/news/2022-11-...lion-firm-launches-retail-crypto-trading.html

"The platform promises “commission free” crypto trades, but the company said “a spread of 1% will be factored into every trade execution price.” Fidelity said that 1% is the maximum rate, and they may choose to apply a lower spread percentage or no spread at the beginning."

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My personal opinion is that making crypto more tradable for the masses has one unintended consequence: Crypto is coupled to the stock market even more.

 

[Baron]

No need to set up or understand wallets, or even exchanges

I think that making crypto purchases and custody simpler for the masses will be the key to crypto being more acceptable in the future for sure. Things are not quite there yet, but they are headed in the right direction.

 

[M.W.]

Lol, 1% spread. Here goes the promise of lower transaction costs. Transferring 100,000 and 1k is gone? Preposterous.

This Fidelity product is for the person who "wants crypto" in the absolute easiest way possible but doesn't want to do any more research:

• No need to set up or understand wallets, or even exchanges
• Done from within their existing apps
• Only 2 coin options (initially), BTC or ETH

https://www.kitco.com/news/2022-11-...lion-firm-launches-retail-crypto-trading.html

"The platform promises “commission free” crypto trades, but the company said “a spread of 1% will be factored into every trade execution price.” Fidelity said that 1% is the maximum rate, and they may choose to apply a lower spread percentage or no spread at the beginning."

----------------------------------

My personal opinion is that making crypto more tradable for the masses has one unintended consequence: Crypto is coupled to the stock market even more.

 

[M.W.]

At much higher costs than any other financial institution? I pay 0.015% to convert to a different currency and 25 bucks in fees to change and send virtually ANY amount to the other end of the world.

With this offering I lose 1% just for the privilege...thats the brave new world? Praying all those dumb youngsters learn basic algebra in school.

I think that making crypto purchases and custody simpler for the masses will be the key to crypto being more acceptable in the future for sure. Things are not quite there yet, but they are headed in the right direction.

 

[Pekelo]

The 1% spread is prohibitive for actual trading. But if you are thinking of investing and putting money in every month or quarterly and you are hoping for gazillion % returns, then that is an acceptable fee for convenience of not dealing with wallets and offshore exchanges.

The thing is though, if crypto is so tied to the stock market, how can it moon, unless the market moons?

 

[GlobalMacro90]

Of course the fees are going to be high Fidelity is the first, or one of the first, traditional finance places to offer this so of course they’re going to charge a fee while they can. It will come down.

It’s important to note however that this is a fee that Fidelity is imposing this is not a fee of the bitcoin network. Transferring value on chain is very cheap and transferring value via lightning is essentially free.

 

[GlobalMacro90]

The 1% spread is prohibitive for actual trading. But if you are thinking of investing and putting money in every month or quarterly and you are hoping for gazillion % returns, then that is an acceptable fee for convenience of not dealing with wallets and offshore exchanges.

The thing is though, if crypto is so tied to the stock market, how can it moon, unless the market moons?

maybe it’ll be correlated maybe not you certainly don’t know that for sure.

I will point out that on a trailing 12 week basis the correlation between bitcoin and the S&P 500 right now is zero. That is down from .8 in mid 2022. If you take the average of rolling 12 week correlations back to 2012 it averages 0.1 so very low correlation though I do admit the correlations have been higher over the past two years. Time will tell.

 

[M.W.]

It's completely irrelevant to distinguish between the two. It's as if I stated that inherently options trading is free, it's just those exchanges and brokers and clearing houses and middle men who take their cut.

Fact is that nothing so far in cryptoland is cheaper than transferring money the old fiat way. And I have forever said that it won't ever get cheaper because there will always be third parties that weave themselves into the crypto fabric which need to recover hundreds of millions in investments and advertising to make themselves relevant. They will always take such a huge bite out of the apple that fees will not be lower than current transfer and payment fees.

Of course the fees are going to be high Fidelity is the first, or one of the first, traditional finance places to offer this so of course they’re going to charge a fee while they can. It will come down.

It’s important to note however that this is a fee that Fidelity is imposing this is not a fee of the bitcoin network. Transferring value on chain is very cheap and transferring value via lightning is essentially free.

 

[M.W.]

First of all this is nitpicking a parameterization to bend to your rhetoric. Not true with most other parameterization. Fact is that downside correlation between equities and btc is sky high and it has been that way for years.

maybe it’ll be correlated maybe not you certainly don’t know that for sure.

I will point out that on a trailing 12 week basis the correlation between bitcoin and the S&P 500 right now is zero. That is down from .8 in mid 2022. If you take the average of rolling 12 week correlations back to 2012 it averages 0.1 so very low correlation though I do admit the correlations have been higher over the past two years. Time will tell.

 

[Baron]

I really don't like this marketing game that these brokerages have been doing for quite a while by calling a trade "commission-free" but then still taking a cut out of the trade by up-charging the customer by giving them an inferior execution price. It just seems like a play on words because they are still getting a fee for facilitating the trade. So it's not a "commission" simply because they aren't calling it one? And with them fiddling around with the spread in a variable way up to 1%, it just seems very um... I hate to use the word shady... but it definitely doesn't seem like a clear and transparent way to do business from the perspective of the customer.