Fidelity Announcement and Brief Market Color

April 26, 2022

Fidelity Investments, the nation's largest retirement plan provider, announced today that the firm will begin integrating Bitcoin and other digital asset investments into Fidelity's online 401(k) platform. Initially the program will offer Bitcoin, but the platform is structured to facilitate other digital asset investments as well. There is growing interest from individuals and plan sponsors to incorporate these investments into their long-term strategies. David Gray, Fidelity's head of workplace retirement products and platforms said "We view this as the beginning, not the end."

The trending support from mainstream institutions like Fidelity is critical for the next wave of adoption. We believe it even more supportive that Fidelity's announcement comes just a month after the Department of Labor issued guidance to employers against offering crypto in their plans. Clearly, the demand for these assets is growing. It's important to keep that big picture in mind, especially among current market disruptions. 

March was a strong month for the fund and a few of you have reached out requesting additional performance metrics. As such, we wanted to provide you with some additional unaudited datapoints and comparisons for your benefit: 

Thus far in April, unsurprisingly,  the market carnage seems to be driven by macro concerns around inflation (both price and employment/wage) and pressure in commodity prices. After the 2yr-10yr treasury curve inverted, talks of a market recession loom large and many allocators continue to de-risk. As a result, the tech sector has been broadly beaten up and crypto has yet to break free. Nevertheless, slow and steady adoption continues and Fidelity's announcement today is a big testament to that. 

Checking live market prices, MTD shows us the below:

It’s not pretty but despite the sea of red, we have a few bright spots in the Flagship Fund including our holdings in NEAR (+3.39% MTD), a rotation into stablecoin lending, and a new ETH staking strategy. Additionally, we’ve been overweight Ether heading into Ethereum’s anticipated upgrade to a complete Proof-of-Stake blockchain (now expected Q3, 2022). Given this context, our fund appears on pace to outperform the broader digital asset market.

We hope this commentary and market data is helpful. Please feel free to reach out to us with any questions or comments.

Sincerely, 

Your team at Perceptive