With the rise of cryptocurrency adoption, traditional financial institutions like Fidelity have entered the crypto space. While Fidelity is best known for retirement accounts and investment services, its Fidelity Crypto platform allows users to buy and sell Bitcoin (and Ethereum) alongside traditional assets. This guide walks you through how to buy Bitcoin via Fidelity, covering setup, fees, security, and alternatives.
## Why Buy Bitcoin Through Fidelity?
Fidelity Crypto offers a trusted, regulated platform for investors who prioritize security and convenience. Key benefits include:
– **Integration with existing accounts**: Manage crypto alongside IRAs, brokerage, or 401(k) accounts.
– **Robust security**: Funds are custodied by Fidelity Digital Assets, which uses cold storage and insurance.
– **Simplified taxes**: Transactions are tracked and reported in one place.
– **Low fees**: No commissions; trades incur a 1% spread fee.
Note: Fidelity Crypto is custodial, meaning you don’t own private keys. It’s currently available in select U.S. states.
## Step 1: Set Up a Fidelity Crypto Account
1. **Check eligibility**: Confirm your state is supported (e.g., California, Texas, or New York).
2. **Log into your Fidelity account**: Existing users can access crypto features instantly. New users must:
– Provide personal details (name, SSN, address).
– Verify identity via government-issued ID.
3. **Enable crypto trading**: Navigate to the ‘Crypto’ section and accept terms.
## Step 2: Fund Your Account
Deposit USD using:
– **Bank transfer**: Link a checking/savings account.
– **Existing Fidelity accounts**: Transfer funds from a brokerage or retirement account.
– **Wire transfer**: For instant deposits (may incur bank fees).
Funds typically settle within 1–3 business days.
## Step 3: Purchase Bitcoin on Fidelity Crypto
1. Go to the ‘Trade’ tab and select ‘Crypto’.
2. Choose Bitcoin (BTC) and enter the USD amount.
3. Review the spread (up to 1%) and confirm the trade.
Purchases execute instantly, and Bitcoin appears in your portfolio.
## Storing Bitcoin on Fidelity
Fidelity stores Bitcoin in offline cold storage, insured against breaches. However, you cannot transfer BTC to external wallets. For long-term holdings, consider:
1. **Selling on Fidelity**: Convert BTC to USD and withdraw.
2. **Using a private wallet**: Buy BTC on an exchange (e.g., Coinbase) and transfer to a hardware wallet like Ledger.
## Risks of Buying Bitcoin via Fidelity
– **Custodial risk**: Fidelity controls your keys; you rely on their security.
– **Market volatility**: Bitcoin’s price can swing dramatically.
– **Regulatory changes**: Crypto regulations may impact accessibility.
## Alternatives to Buying Bitcoin via Fidelity
1. **Bitcoin ETFs**: Trade Fidelity’s Wise Origin Bitcoin Fund (FBTC) for indirect exposure.
2. **Crypto exchanges**: Coinbase or Kraken offer self-custody options.
3. **Bitcoin IRAs**: Use Fidelity’s retirement accounts to hold BTC ETFs.
## FAQ
**Q: Can I withdraw Bitcoin from Fidelity?**
A: No. Fidelity Crypto is custodial; you must sell BTC for USD to withdraw.
**Q: What are the fees?**
A: Trades have a 1% spread. No commissions or account fees.
**Q: Is Fidelity Crypto safe?**
A: Yes. Funds are insured and stored offline. SOC 2 compliance adds oversight.
**Q: Can I buy other cryptocurrencies?**
A: Only Bitcoin (BTC) and Ethereum (ETH) are supported.
**Q: Are there tax implications?**
A: Yes. Crypto sales are taxable events. Fidelity provides 1099 forms for reporting.
## Final Thoughts
Buying Bitcoin via Fidelity suits investors seeking a familiar, secure platform. While you sacrifice direct ownership, the integration with traditional accounts simplifies portfolio management. For full control, pair Fidelity with a private wallet or exchange. Always research risks and regulations before investing.
