Several cryptocurrency companies are moving their cash funds to asset managers like Fidelity and investing in securities like Treasuries to protect their consumers due to the continuous destruction in the U.S. banking industry.
Astaria CEO Justin Bram was taken aback when he saw messages from 25 crypto-focused businesses that he had requested initial calls from Boston-based Fidelity to receive on the Telegram channel.
He said that a number of businesses, including major market makers and venture capital companies in digital assets, contacted him. According to Justin Bram, Fidelity and his non-fungible token loan company have been partners for more than a year.
Startups in the cryptocurrency industry are able to create brokerage accounts with Fidelity so they may invest in securities like Treasury bonds. While Fidelity isn’t a typical bank, Bram said that they are unquestionably safer than tier-two and higher institutions.
With the failure of three consecutive crypto-friendly banks, including Silicon Valley Bank, Silvergate Bank, and Signature Bank, crypto businesses are still seeking for financial partners for their operations.
According to Academy Asset Management’s chief investment officer, Seth Rosenthal, “we had a lot of inbound contacts” from conventional and crypto-related companies as a consequence of the bank collapses and general liquidity issues. Many businesses want to put their money into safer Treasuries and other highly liquid government assets.
Conventional managers, such as us, may handle their cash reserves via independently managed accounts, according to Rosenthal. It enables customers to directly hold the underlying equities.
“I would recommend that if you have substantial cash amounts in the bank, you should seriously reevaluate how much you want to keep there. Do you want to transfer it to a separately managed account where you may invest in high-quality, tradable assets like Treasury bonds, he said.
Compiled by Coinbold