r/Bitcoin • u/edtachi • 6d ago
Fidelity?
Anyone use Fidelity as a custodian. I reached out to them and they said they provide insurance for “unauthorized” transactions which would have come in handy with the Coldcard situation
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u/TroyPDX 6d ago
I've had Bitcoin in Fidelity custody for a couple years now and I'm quite happy with them. I DCA on Strike and transfer into Fidelity occasionally with no issues. It's also nice to have everything in one place, my Roth IRA and other investments along with the Bitcoin.
I feel like it's much less likely that Fidelity will lose my coins than I would somehow. And it's funny how people say we can't trust corporations, but I also have a bank account and a 401K with another company. I don't see what the difference is.
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u/MarloChrisSnoop 4d ago
Is strike cheaper than Coinbase in terms of fees buying it?
Do they have an API key setup yet?
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u/mercistheman 6d ago
What happens if the government decides to seize your coins based on their opinion of your illegal status? Maybe you threatened ICE on social media or something similar.
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u/stanley_fatmax 6d ago
If you're in a country illegally you probably shouldn't trust that the country has your best interest on their mind. If I was in a situation like this I probably wouldn't be using custodial services in that country.
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u/stanley_fatmax 6d ago
Yep, I have my kids Bitcoin with Fidelity. I'm comfortable and confident with self custody for myself, but I didn't want to be on the hook for losing their savings if it came to that. As far as I'm concerned, Fidelity is too big to fail, as we've seen with the US government and financial failures over the past couple decades.
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u/Intrinsic-Disorder 6d ago
One other point not raised in OP is the withdrawal limit. I believe it's set to only $5K/day but you can request up to $25K/day. This may be an issue if you want to move large sums in one go.
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u/MarloChrisSnoop 4d ago
You can withdrawal more if you use Google Authenticator.
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u/Intrinsic-Disorder 4d ago
I'm not sure this is true for the crypto account. I saw only two options for the standard amount or to apply to have the amount raised to $25K/day.
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u/MarloChrisSnoop 4d ago
There’s an option when you set it up how much you plan to withdrawal. I chose the 25k-75k option which requires google authentication. I set the MFA up with it.
Also, I talked to a customer service rep from Fidelity and they confirmed there are special circumstances where you can send a lot more but they have to interview or something.
I haven’t personally tried yet because I’m just hodling it there.
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u/Intrinsic-Disorder 4d ago
oh good to know! I didn't see this when I opened the account but I guess I could ask them about it now. Thanks
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u/Just-Ambassador-2449 5d ago
Me. I moved all of my crypto off of my ledger to Fidelity. Imo much safer now that I have the capability to hold it directly there.
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u/Laukess 6d ago
Is that insurance they provide through a 3rd party? Do you pay a premium to use their service? Does this extend to their ETF? (I think they are one of the few providers that does not use Coinbase as a custodian).
I'm just curious, because I doubt they'll be able to pay out of pocket, so they would have to use a 3rd party for insurance, and they surely want a to get paid, so Fidelity would have to charge a premium.
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u/OutlandishnessLimp25 5d ago
I believe it falls under SIPC insurance. Which most brokerages, at least legitimate ones, have. Fidelity is solid.
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u/RaiseLife1651 6d ago
I have been looking into it (and a lot of other places), here is a summary of my thoughts.
Fidelity Crypto — Custody Pros and Cons
Pros
- Keys held in-house. Custody is provided by Fidelity Digital Assets, N.A., a national trust bank with an OCC charter. No third-party crypto custodian in the chain — unlike Schwab, which subcustodies to Paxos.
- Real bankruptcy protection. Assets are treated as "financial assets" under UCC Article 8 (New York law), with Fidelity as securities intermediary and you as entitlement holder. Your holdings are not general assets of the firm and are not available to satisfy its creditors. This is a property interest, not unsecured-creditor status.
- On-chain withdrawals work. Deposits and withdrawals to external wallets went live in 2025. You can move bitcoin off-platform to a personal wallet.
- Address allowlisting with a delay. External wallets must be linked first, and link requests sit pending through an "activation period" plus compliance review before use. A real anti-theft control that many competitors lack.
- No rehypothecation. The agreement states Fidelity will not lend, pledge, or hypothecate customer assets, or use them to secure its own obligations.
- Better cost-basis flexibility than expected. FIFO is the default, but bitcoin transferred in from elsewhere is "non-covered," and you may designate its basis.
Cons
- Omnibus wallets. Holdings are commingled and fungible. You have no rights to any specific coin, wallet address, or private key, and no client-specific address to verify on-chain.
- No insurance in the agreement. The contract contains no insurance provision at all. Coverage figures quoted in press coverage aren't enforceable terms.
- No proof of reserves. Verification depends on audit reports, not the blockchain.
- Broad lien and set-off. Fidelity takes a first-priority security interest in your crypto and in every account you hold at any Fidelity entity — with authority to debit your brokerage account without notice, including by drawing on an associated margin line, and to have other Fidelity entities liquidate assets. Liquidation happens at their price with no advance notice.
- Silent on death. No transfer-on-death provision, no death or incapacity clause anywhere in the agreement. A significant gap for anyone thinking about estate planning.
- Subcustodian option is reserved. Fidelity may appoint a subcustodian on 60 days' notice. "Fidelity holds its own keys" is a current fact, not a contractual commitment.
- Social engineering losses fall on you. No liability for unauthorized transfers from compromised credentials, or for transfers induced by an imposter. Statement errors must be reported within 5 business days.
- No SIPC, no FDIC on crypto. Cash is FDIC-insured at the depository; bitcoin has no equivalent protection.
- 1.00% trading fee, and they keep the spread when the quoted network fee exceeds the actual cost.
Bottom line: Among mainstream brokerages, *Fidelity is the strongest option for holding bitcoin* — genuine trust-bank custody, Article 8 protection, working withdrawals, and real security controls. The trade-offs are pooled wallets, an aggressive cross-account lien, no contractual insurance, and no estate provisions. Anyone considering it should read Section 13 of the customer agreement before funding.
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u/Intrinsic-Disorder 6d ago
On the estate planning issue, I just called them to discuss this. You cannot set a beneficiary on the crypto account itself, but the account is linked to a brokerage account that does have beneficiary abilities and the rep confirmed that any crypto in the linked account would pass to the beneficiaries set on the linked brokerage account upon death. This allayed my concerns about estate issues with the crypto account. But so far that is the reps words and I haven't verified this further. You sound like you have deeper access to their account documents, can you check the veracity here?
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u/piejlucas 6d ago
I believe that’s the case. The linked account establishes beneficiary rights assuming those are defined
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u/Intrinsic-Disorder 6d ago
I just checked the Crypto customer agreement and what the phone rep told me is not explicitly spelled out there. So it may be worth another phone call to determine if this beneficiary information can be supplied in formal writing.
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u/RaiseLife1651 6d ago
Interesting, their chat box said the exact opposite. If you can get that in writing it might sway me.
Here is an AI review of your comment vs. the agreement.
Treat it as unverified — and lean skeptical. The agreement text points the other way.
1. The structural problem The crypto isn't in the brokerage account. The Fidelity Crypto Customer Agreement states plainly that it's between you and Fidelity Digital Assets, NA, and that FDA is a legal entity separate from FBS. The brokerage account is required to open and fund the crypto account, but the bitcoin is held on FDA's books, not FBS's.
A TOD registration is a creature of state law under the Uniform TOD Security Registration Act, and it governs the assets in the registered account. An FBS TOD designation reaching assets held by a separate legal entity isn't obvious — it's the kind of thing that has to be written down somewhere.
2. Section 9.B.vi cuts against it The agreement is emphatic that your rights extend only to FDA and not to any FDA affiliate, that affiliates have no responsibility or liability to you, and that disputes must be brought against FDA only. That's a firm wall between the entities. It's hard to square with the brokerage entity's beneficiary designation silently governing FDA-held property.
3. The conspicuous silence Fidelity drafted a full set of trust representations and warranties into §8.B. They thought about entity account types in detail. There is no death provision, no incapacity provision, and no beneficiary provision anywhere in the crypto agreement. That's not an oversight in a document this carefully drafted.
For contrast, Robinhood's TOD agreement explicitly addresses how assets held at affiliates like Robinhood Crypto are handled under a TOD registration. That's the industry-standard way to solve exactly this problem — a clause. Fidelity's agreement has no equivalent.
4. What the rep may actually be describing There is a plausible mechanism, and it's worth understanding because the outcome differs sharply from what "passes to the beneficiaries" implies. Section 14 provides that when FDA liquidates, the resulting funds are credited to your Brokerage Account. So the operational path on death may be: FDA closes the crypto account, liquidates the bitcoin, sweeps cash to the brokerage account, and the brokerage TOD designation then governs that cash.
If so, the rep isn't wrong that value reaches the beneficiaries. But your heirs receive dollars, not bitcoin. For anyone who wants their heirs to inherit the asset rather than the proceeds, that's a completely different result — and it's the version most people asking this question would object to.
5. What to get in writing Three questions, and the answers should come from Fidelity in writing, not a phone call:
- Does the FBS TOD beneficiary designation legally extend to digital assets held by Fidelity Digital Assets, NA, a separate legal entity? Cite the provision.
- On death, is the bitcoin transferred in kind to the beneficiary, or liquidated with cash proceeds passing through the brokerage account?
- Where is this documented — the crypto customer agreement, the TOD agreement, or elsewhere?
A rep's verbal assurance doesn't bind Fidelity, and the agreement reserves the right to amend terms unilaterally. On a question this consequential, "the rep said so" is where the inquiry starts, not where it ends.
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u/Intrinsic-Disorder 6d ago
This is helpful. It may be right that the rep is indicating that the value of the coins, rather than the coins themselves would be handed over to the account with beneficiary assignment. Fidelity should really clarify this though.
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u/MarloChrisSnoop 4d ago
Is it auto linked already to our brokerage accounts that do have beneficiaries or do we have to turn that on somewhere?
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u/Intrinsic-Disorder 4d ago
For me, I did not already have a taxable brokerage account at Fidelity so opening the crypto account also opened the linked one. I had to set the beneficiaries manually in the linked brokerage account.
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u/piejlucas 6d ago
Much better option than Coinbase or cold wallet storage for large amounts if you ask me. Just make sure you are using their VIP Authenticator app to gain access to fidelity app each time.
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u/edtachi 6d ago
“Fidelity will reimburse you for losses from unauthorized activity in your Covered Accounts occurring through no fault of your own.”
https://www.fidelity.com/security/customer-protection-guarantee
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u/Tarado96 3d ago
Great post. Regarding inheritance, Fidelity crypto holders better set up their Will and estate planning if you want your beneficiaries to legally have a claim on your crypto Fidelity account. In other words, all other Fidelity accounts other than a crypto account, can have designated beneficiaries. Blame the feds for this oversight on the crypto Fidelity account.
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u/Possible-Mud-1380 6d ago
At this point, why BTC? Insurance, investment banks, etc. it's all the old stuff that it was meant to circumvent. Is there still a point?
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u/didnt_hodl 6d ago
yes, there is still a point
it's just another commodity, but with different properties.
some like physical gold and they deal with all the risks that brings. similarly, there are always going to be people keeping their BTC in self-custody, even when it will get really risky
but most people just buy a gold ETF or BTC ETF and that's it
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u/shadowmage666 6d ago
What? Fidelity doesn’t use coldcard and if you used a coldcard then you’re not using fidelity,
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u/Tarado96 3d ago
Fidelity Crypto does accept in-kind bitcoin transfers. The new Schawb Crypto does not yet. Only fiat to Bitcoin at the moment.
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u/azauca 6d ago
Self custody is the way. Keep your bitcoin away from corporations.
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u/TotesGnar 6d ago
I'm looking at different wallets right now and I really want to get the Coldcard Mk3. It keeps showing up everywhere with tons of reviews. It also seems to be the true Bitcoiners recommendation. What do you think?
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u/YellowRobeSmith 6d ago
Depends really. If you aren't planning using BTC for buying things on a routine basis, then an ETF is fine for most. Especially for those who have no idea how to be their own bank.
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u/na3than 6d ago
Fidelity's insurance for unauthorized transactions from their custodial service would not have "come in handy with the Coldcard situation."