Fidelity custody launch date and Swift-R3 tie-up provides floor for bitcoin

Bitcoin has failed to hold support at $3,500 but the decline that began on Monday has not deepened.

The top crypto is drawing dangerously close to long-term support at the 200-day moving average on the one-week chart at around 3150. However it looks as though it may hold above that price for now, possibly helped by some good news flow, notably from Fidelity.

The VanEck bitcoin ETF has been withdrawn for now and the muted reaction of the market suggests that the news was already built into the price. VanEck has made it clear that the latest delay was as a result of the government shutdown in the US, which has now come to and end, although that could change in a few weeks’ time.

Fidelity Digital Assets

But that disappointment has been overshadowed by fund giant Fidelity announcing that Fidelity Digital Assets is launching in March. The custodial service from Fidelity could be a major on-ramp for institutions readying to enter the crypto market.

The unsourced Bloomberg report on the matter said that the service would begin with bitcoin to be followed by Ether.

“We are currently serving a select set of eligible clients as we continue to build our initial solutions,” the company said in a statement Tuesday. “Over the next several months, we will thoughtfully engage with and prioritize prospective clients based on needs, jurisdiction and other factors.”

CEO Abigail Johnson has been a fan of crypto for some time and notably encouraged Fidelity to start mining bitcoin in 2015.

Fidelity Investments has $2.5 trillion asset under management making it the fourth largest asset management company in the world.

SWIFT-R3 partnership

Hot on the heels of the Fidelity news was the tie-up between financial messaging service SWIFT and R3, one of the oldest blockchain consortiums in the industry.

The two are setting up a pilot based on Swift’s Global Payment Innovation platform (dpi) ( https://www.swift.com/our-solutions/global-financial-messaging/payments-cash-management/swift-gpi ) and R3’s Corda blockchain ( https://www.corda.net/ ).

Interestingly, Ripple’s XRP token has been rising on the back of the news in the hope that its presence inside the Corda infrastructure will mean it has increased its adoption chances.

Swift and Ripple are competitors, although Swift may dispute that in the sense that Ripple has as yet managed to get a foothold in cross border payments despite the numerous projects it has ongoing with banks around the globe.

XRP jumps… then pulls back

The price jump by XRP is even more surprising given the dispute between R3 and Ripple Labs that only ended in September last year.

The initial spurt by XRP has now come-off as it sinks with buyers that this may not be the unalloyed positive for XRP many initially assumed.

R3 and Ripple make friends?

R3 filed suit against Ripple Labs for allegedly violating an agreement to buy XRP at a predetermined price back in September 2017.

Since the agreement made last year the two companies have been playing nice, with Corda integrated XRP.

Ripple owns 60% of XRP supply. Most of the partnerships that Ripple has with banks involves trials of the xCurrent system which does not use XRP for liquidity. xRapid does use XRP but it has attracted far less interest from banks because of the volatility of crypto and the dominant position of Ripple regarding supply. Many Ripple buyers have overlooked these key differences.

Ripple has belatedly taken a leaf out of the Tron playbook and is starting an accelerator program. However it is much larger than Tron’s $1 million size, offering financial startups access to a pool valued at $300 million as it looks to jump-start xRapid adoption and XRP as a liquidity source.

About the Author

Jennifer Collins
Jennifer has been writing about crypto since 2016 when she first got interested as a student at Queen Mary University in London. You can email me here: jennifercollins@coinintelnews.com

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