Michael Durbin, the Institutional President of Fidelity, advocates for more digital currency allocations for consumers in an attempt to match current demand.

Speaking at an annual meeting of the Securities and Financial Markets Industry Association in New York City, Durbin said institutional investors will need to be conservative in allocating funds to consumers after conducting a proper risk assessment.

“As digital assets extend beyond CRYPTOCURRENCIES and other types of wrapped tokens, or whatever the regulatory environment makes it easy for us, we think there will be increased funding for building that portfolio,” Durbin said. “A basis for getting more digital assets into the wallets of end consumers.”

The digital currency ecosystem is highly volatile and this will still put investments at risk. The cryptocurrency industry is trillions of dollars since it peaked in November 2021, as lower prices and companies collapsing generally sparked bearish sentiments in the space as a whole.

Durbin advocated that caution should be the watchword for crypto investors when choosing assets to allocate investor funds.

“What we will give advisers is to be careful about their risk budget if they are going to allocate money to bitcoin for alpha creation,” Durbin said. “You’re better off setting aside a fairly significant amount of your risk budget, which may be defensible, but that’s the evolution we need to get into.”

Fidelity has played a frontline role in helping break down the barriers for institutional investors to get involved in the crypto ecosystem. In addition to launching an avenue for 401(k) subscribers to invest in digital currencies, the company has been operating your crypto custody business since 2019, paving the way for institutions to protect the currencies they invest in.

Fidelity has attempted to launch a Bitcoin-based exchange-traded fund (ETF) product, but in characteristic SEC fashion, its application has been refused together with others.

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