Fidelity's Cryptocurrency Offerings

Fidelity offers cryptocurrency products through a separate platform called Fidelity Crypto, which is distinct from its main brokerage accounts. The platform lets you buy, sell, and hold Bitcoin and Ethereum directly. Fidelity also offers cryptocurrency exposure through traditional investment accounts via Bitcoin and Ethereum spot exchange-traded funds (ETFs), which trade like stocks within your existing Fidelity brokerage account.

The two paths are different: buying crypto on Fidelity Crypto means you own the actual digital asset and can transfer it to a digital wallet if you choose. Buying a Bitcoin or Ethereum ETF through your regular Fidelity account means you own shares of a fund that holds the cryptocurrency, and the fund custodian holds the underlying asset.

Key Takeaways

  • Fidelity Crypto is a separate platform where you can buy and sell Bitcoin and Ethereum with U.S. dollars, distinct from your regular Fidelity brokerage account.
  • Bitcoin and Ethereum spot ETFs trade within your standard Fidelity brokerage account and offer cryptocurrency exposure without owning the digital asset directly.
  • Fidelity Crypto accounts require identity verification and a separate login from your main Fidelity account.
  • Transaction fees, minimum purchase amounts, and available cryptocurrencies differ between Fidelity Crypto and the ETF route.

How Fidelity Crypto Works

Fidelity Crypto is a standalone platform where you fund an account with U.S. dollars and trade Bitcoin or Ethereum. You create a separate login and go through identity verification specific to the crypto platform. Once verified, you can place buy and sell orders during market hours.

When you buy cryptocurrency on Fidelity Crypto, you can hold it in your account or transfer it to an external digital wallet—a feature that distinguishes it from some competitors. The platform shows your holdings in real time and displays current market prices. Fidelity Crypto is not the same as your brokerage account; it is a separate service with its own interface and funding mechanism.

Bitcoin and Ethereum ETFs in Your Brokerage Account

Fidelity offers spot Bitcoin ETFs and spot Ethereum ETFs that you can buy and sell like any other stock or fund within your regular Fidelity brokerage account. These ETFs hold the actual cryptocurrency and track its price. You do not own the Bitcoin or Ethereum directly; instead, you own shares of the fund.

The advantage of the ETF route is that it integrates with your existing account structure—you can hold them in a taxable brokerage account, an IRA, a 401(k), or other Fidelity accounts depending on the fund and your plan rules. You can also set up automatic investments or use other brokerage features you already have. The disadvantage is that you cannot transfer the underlying cryptocurrency to an external wallet.

Fees and Minimums

Fidelity Crypto charges transaction fees when you buy or sell Bitcoin or Ethereum. The fee structure varies based on order size and market conditions. There is no stated minimum purchase amount, though very small orders may not be practical due to fees.

Bitcoin and Ethereum spot ETFs have expense ratios—annual fees charged as a percentage of your holdings—that vary by fund. These are typically lower than active management fees but higher than zero. You pay no transaction fee to buy or sell the ETF itself through Fidelity, though you may pay a bid-ask spread (the difference between the buy and sell price at any given moment).

Tax Treatment and Reporting

Cryptocurrency purchases on Fidelity Crypto are treated as taxable events. When you sell Bitcoin or Ethereum, you owe capital gains tax on the difference between your purchase price and sale price. Fidelity Crypto provides transaction history and cost basis information to help you report these gains and losses.

Bitcoin and Ethereum ETFs held in a taxable account follow the same capital gains rules as any other investment. If held in a tax-advantaged account like a traditional or Roth IRA, the tax treatment depends on the account type—gains in a Roth IRA are not taxed when withdrawn in retirement, while traditional IRA withdrawals are taxed as ordinary income. Consult a tax professional about your specific situation, as cryptocurrency tax rules are complex and vary by jurisdiction.

Security and Custody

Fidelity Crypto uses industry-standard security measures including encryption and two-factor authentication. Cryptocurrency held on the Fidelity Crypto platform is custodied by Fidelity, meaning Fidelity holds the private keys and is responsible for safeguarding the asset. If you transfer cryptocurrency to an external wallet, you become responsible for securing it.

Bitcoin and Ethereum ETFs are held by the ETF's custodian, typically a major financial institution. Your shares of the ETF are held in your Fidelity account and protected under standard brokerage account protections. Neither Fidelity Crypto holdings nor ETF shares are covered by FDIC insurance, as they are not bank deposits.

Which Option Might Fit Your Situation

Choose Fidelity Crypto if you want to own the actual cryptocurrency, plan to transfer it to an external wallet, or prefer a dedicated crypto trading platform. This route gives you direct ownership and control of the asset.

Choose a Bitcoin or Ethereum ETF if you want cryptocurrency exposure within your existing Fidelity account structure, plan to hold long-term without moving the asset, or want to use tax-advantaged accounts like an IRA. This route is simpler to manage alongside other investments and integrates with Fidelity's broader account features.

Frequently Asked Questions

Can I hold Bitcoin or Ethereum in my Fidelity IRA?

You cannot hold cryptocurrency directly in an IRA through Fidelity Crypto. However, you can hold Bitcoin and Ethereum spot ETFs in a traditional or Roth IRA, which gives you cryptocurrency exposure within a tax-advantaged account. Check with Fidelity about which specific ETFs are available in your IRA plan.

What happens if Fidelity goes out of business?

Cryptocurrency held on Fidelity Crypto is not covered by FDIC or SIPC insurance. However, Fidelity is a large, established financial institution with regulatory oversight. If you are concerned about custodial risk, you can transfer your cryptocurrency to an external wallet that you control directly.

Can I transfer cryptocurrency between Fidelity Crypto and my brokerage account?

No. Fidelity Crypto and your brokerage account are separate platforms. You cannot move Bitcoin or Ethereum between them. You would need to sell on one platform and buy on the other, which triggers a taxable event.

Are there other cryptocurrencies besides Bitcoin and Ethereum?

Fidelity Crypto currently offers Bitcoin and Ethereum. The Bitcoin and Ethereum spot ETFs available through your brokerage account track only those two assets. Fidelity does not currently offer other cryptocurrencies like Solana, XRP, or Dogecoin through these platforms.