Fidelity's new company and other crypto news this week
Illustration: Rebecca Zisser/Axios
This week the U.S. Securities and Exchange Commission announced it's set up a new office focused specifically on "fintech" (including crypto-assets and blockchain tech), but that's not all the news you should know.
Catch up quick: Fidelity wants to help big cryptocurrency investors; amid growing Tether concerns, other stablecoins are having a great week; and most 2017 initial coin offerings (ICOs) are now trading below their listing price.
- Why it matters: Fidelity's new company will provide services to institutional investors, including custody, which has been one of the main hurdles to getting more institutional investors into cryptocurrencies. While some independent companies like BitGo and Kingdom Trust exist to help, several large financial institutions are developing their own.
Amid growing Tether concerns, other "stablecoins" are having a great week (Coindesk)
- Why it matters: Tether, a digital token said to be backed by U.S. dollars, is seeing its price continue to drop below $1 as investors have been increasingly weary of the issuer's claims and are rushing to exchange the tokens for real dollars. Meanwhile, a number of digital token exchanges are adding or considering adding more stablecoins, reinforcing the growing market demand for this category of asset.
- Why it matters: During the initial coin offering craze last year, scores of companies and projects rushed to raise millions of dollars by selling digital tokens, many viewing this as an alternative to selling company equity to investors. But in line with many skeptics at the time, Ernst & Young, which authored the study, found that 86 out of 141 projects are now trading below their listing price, and 71% still have no working product. This is significantly different from what you'd see in traditional venture-backed startups, the firm noted.