Ethereum News Today: Institutional Shift to Ethereum Drives Fidelity's $3B Growth

Fidelity Digital Assets' crypto custody holdings increased by $3.02 billion in the third quarter of 2025, rising to $48.15 billion by September 30 from $45.13 billion on July 1, according to data analyzed by Finbold. The growth was primarily driven by Ethereum (ETH), with holdings surging from 625,770 tokens to 853,380, adding nearly $1.97 billion in value as ETH prices climbed from $2,502 to $4,139 during the period. This marked a stark contrast to Bitcoin (BTC), where custody balances fell by 4,160 tokens despite a price increase from $108,383 to $112,162, indicating a strategic shift in institutional demand toward Ethereum-based assets.

The expansion in Q3 followed a mixed first half of the year. In Q2, Fidelity's custody portfolio grew by $11.05 billion, with Ethereum again leading the charge. ETH holdings increased by 131,560 tokens as prices advanced from $1,829 to $2,437, while Bitcoin contributed $10.43 billion in gains. However, Q1 saw a $5 billion decline in custody assets due to market downturns and reduced ETH holdings, which dropped by 156,000 tokens as prices fell. Year-to-date, Fidelity's custody business has added $9.54 billion, with Ethereum accounting for over 350,000 tokens of the rebound.

The firm's growth lagged behind competitors like BlackRock, whose crypto portfolio expanded by $22.46 billion in Q3. Despite this, Fidelity's focus on Ethereum aligns with broader institutional trends. Both firms prioritized smart contract platforms, reflecting a shift in capital allocation beyond Bitcoin's dominance. Analysts attribute this to Ethereum's infrastructure for decentralized finance (DeFi) and stablecoin ecosystems, which have attracted institutional investors seeking yield-generating and programmable assets.

Market dynamics in Q3 2025 were shaped by new U.S. regulations, including the GENIUS Act, which clarified stablecoin oversight and boosted liquidity in DeFi. Ethereum's performance was further supported by declining exchange balances, suggesting increased long-term storage of the asset. The ETH/BTC ratio climbed above its 365-day average, signaling potential for further gains relative to Bitcoin. Meanwhile, Bitcoin's price stability and ETF inflows reinforced its role as a reserve asset, though Ethereum's smart contract functionality continues to draw institutional interest.

Fidelity's custody growth underscores its position as a key player in institutional crypto adoption. The firm's strategic emphasis on Ethereum highlights a broader industry trend toward diversification, as asset managers seek to capitalize on emerging use cases beyond Bitcoin. While challenges remain, including regulatory scrutiny and market volatility, Fidelity's Q3 performance demonstrates resilience and adaptability in a rapidly evolving sector.

Source: [1] Fidelity's crypto holdings climb by $3 billion in Q3 2025 - Finbold (https://finbold.com/fidelitys-crypto-holdings-climb-by-3-billion-in-q3-2025-finbold-report/)