Crypto lender Nexo announced a new collaboration with institutional crypto custodian Fidelity Digital Assets for a suite of products aimed at providing institutional investors with more onramps into crypto.
Fidelity Digital Assets is the blockchain branch of Fidelity Investments, the Boston-based asset management company that manages more than $7 trillion of client assets.
The two companies have struck a deal to develop a product range that will extend Nexo’s credit lines and Fidelity’s state-of-the-art secure crypto brokerage to institutional clients.
Nexo co-founder and managing partner Kalin Metodiev said in a prepared statement that “working with Fidelity Digital Assets is the latest milestone in our quest to offer a complete institutional platform and to onboard traditional finance companies into the digital asset ecosystem.”
The crypto platform lets users borrow cash against crypto at a variety of different rates. Similarly, users can earn up to 20% interest on assets like Bitcoin, Tether (USDT), Ethereum, and many others.
Christopher Tyrer, head of Fidelity Digital Assets in Europe, said the partnership comes amid a “tremendous growth of interest in digital assets from institutions within the European market.”
Nexo, Fidelity in recent news
Last month, Nexo acquired a stake in digital securities broker-dealer Texture Capital in a “strategic move” that would allow it to potentially make use of Texture’s broker-dealer license, and its registration in every state, to service U.S. citizens.
Nexo also recently announced a $100 million buyback program, enabling the company to periodically repurchase its native NEXO token on the open market.
After a vesting period of 12 months after repurchase, the company can use the tokens for strategic investments via token mergers, or pay interest to clients who receive their daily yields in NEXO.
The buyback program will, of course, help boost the value of NEXO, which is currently the 89th biggest cryptocurrency, with a market capitalization of $1.41 billion. The token is currently trading at $2.52, up 24.9% over the past 24 hours, according to CoinGecko.
Fidelity Investments made headlines when it launched the fifth spot-market Exchange-Traded Fund (ETF) in Canada earlier this month, making it the largest asset manager to launch a Bitcoin ETF so far.
The fact that the firm launched it in Canada due to the U.S. Securities and Exchange Commission’s reticence to approve a single ETF is likely cause for some embarrassment, tweeted Bloomberg ETF analyst Eric Balchunas.
This should be embarrassing for the SEC that one of America's biggest, most storied names in investing is forced to go up North to serve its clients. But it prob won't matter.
— Eric Balchunas (@EricBalchunas) November 30, 2021
Thus, while Nexo and Fidelity are both separately expanding the market for retail investors, today's news offers a similar promise to institutional investors.