Fidelity made headlines in April when it said investors could add Bitcoin to their retirement accounts by the end of the year. Now, as crypto winter sets in and the sector suffers nearly $1 trillion in losses over a month, Fidelity’s digital assets arm is doubling its headcount on the bet that institutional investor interest in crypto will persevere.
Fidelity Digital Asset Services, a subsidiary of Fidelity Investments, said it would hire 110 tech workers and 100 customer service employees as it believes institutional crypto trading demand will increase, the Wall Street Journal reported Tuesday.
The president of the division, Tom Jessop, told the Journal that the new tech workers will help the company build infrastructure for custody and trading services for the cryptocurrency Ether.
Fidelity Digital Assets did not immediately respond to Fortune’s request for comment.
The move comes as nearly $1 trillion of value in the crypto sector was erased from April to May and the two most popular cryptocurrencies are trading far lower than their level at the start of the year. Bitcoin, the most popular cryptocurrency, which makes up nearly half of the market, saw a boost Tuesday afternoon but was still down about 31% year to date, and 53% from its highs in November. Ether, the second most popular cryptocurrency, also jumped on Tuesday afternoon but was still down 47% year to date and 69% from its all-time high of $4,891 in November.
Jessop told the Journal that falling crypto prices have not affected the company financially, although the flow of new customers has slowed. Regardless, the company is investing in crypto trading technology, he said.
“We’re trying not to focus on the downturns and focus on some of the long-term indicators,” Jessop told the Journal. “We are trying to build infrastructure for the future because we measure success over years and decades, not weeks and months.”
Fidelity Investment’s decision to let its customers incorporate Bitcoin into their retirement accounts was a landmark first for major retirement plan providers. Fidelity Investments is the nation’s largest 401(k) provider. Although Fidelity’s platform will not allow more than 20% of a customer’s contributions to go to Bitcoin, it will open the door to crypto trading for millions when the feature officially launches later this year.
Still, crypto adoption rates appear to be relatively low among average Americans. Last week, a Federal Reserve survey of 11,000 people revealed that 12% of adults in the U.S. held or used cryptocurrencies in the past year. But only 2% had actually used cryptocurrency to buy anything in the past 12 months.
Yet institutional interest in crypto is at a record high. Morgan Stanley said in a note that institutional investors now outweigh retail traders in crypto trading, the Financial Times reported.
“Retail investors are no longer the dominant crypto trader. The largest proportion of daily crypto trading volumes is from crypto institutions, much of which comes from them trading with each other. For example exchanges, custodians, and crypto funds. Retail traders were dominant around four years ago, when Bitcoin traded below $10K,” according to Morgan Stanley.
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