Fidelity Digital Assets, the division of Fidelity Investments that handles cryptocurrency custody, has reported a significant decline in revenue and a loss of over £7 million for the previous year. In the 12-month period ending in December 2023, the company generated £545,000 in revenue, down from £1.34 million the previous year. The decrease in revenue can be attributed to a decrease in service-level agreement fees associated with digital asset management services provided to Fidelity Investments. Operating expenses for the unit increased by 32% to £7.8 million, primarily due to higher staff salaries and benefits. Despite these challenges, Fidelity Digital Assets remains optimistic about its future prospects and plans to expand its product and service offerings. The global crypto custody industry is becoming more competitive, with traditional finance names entering the market. European asset managers have also made strategic moves to gain exposure to digital assets.
