Yes, you can buy crypto on Fidelity, but only through a separate brokerage account

Fidelity lets you buy Bitcoin and Ethereum through Fidelity Crypto, a standalone platform separate from your regular Fidelity brokerage account. You cannot buy cryptocurrency through a traditional Fidelity investment account, IRA, or 401(k). If you want to hold crypto, you need to open a dedicated crypto account and fund it independently.

Fidelity Crypto is available to U.S. residents 18 and older. The account has no minimum deposit requirement, and you can buy as little as $1 worth of Bitcoin or Ethereum. Fidelity charges a flat fee per transaction rather than a percentage of your purchase, which means smaller trades can be more expensive relative to the amount you're buying.

Key Takeaways

  • Fidelity Crypto is a separate account from your regular Fidelity brokerage and requires its own login and funding.
  • You can only buy Bitcoin and Ethereum through Fidelity Crypto; other cryptocurrencies are not available.
  • Fidelity charges a flat transaction fee, not a percentage, so the cost per dollar invested varies depending on trade size.
  • Your crypto holdings in Fidelity Crypto are not may be able to access for Fidelity's standard account protections like SIPC coverage.

How to set up a Fidelity Crypto account

Start by visiting the Fidelity Crypto website or downloading the Fidelity Crypto mobile app. You'll create a new account with your email, set a password, and verify your identity. Fidelity will ask for your Social Security number and address as part of standard identity verification.

Once your account is open, you link a bank account to fund it. You can transfer money via ACH (the standard bank transfer method), which typically takes one to three business days. After your bank transfer arrives, the cash sits in your Fidelity Crypto account ready to buy Bitcoin or Ethereum whenever you choose.

What cryptocurrencies Fidelity offers

Fidelity Crypto currently offers only two cryptocurrencies: Bitcoin and Ethereum. You cannot buy altcoins, stablecoins, or any other digital assets through this platform. If you want to trade other cryptocurrencies, you would need to use a different exchange.

Both Bitcoin and Ethereum can be bought in fractional amounts, meaning you don't have to buy a whole coin. You can purchase $10 or $100 worth if that fits your budget. Fidelity displays real-time prices and lets you place market orders (buy at the current price) or limit orders (buy only if the price drops to a specific level you set).

Fidelity Crypto fees and costs

Fidelity Crypto charges a flat transaction fee per buy or sell order. The exact fee amount is not published on their website and varies; you'll see the fee displayed before you confirm your trade. This flat-fee structure means a $50 purchase and a $5,000 purchase may have different effective costs as a percentage of what you're buying.

There are no monthly account fees, no inactivity fees, and no fees for holding your crypto. You only pay when you buy or sell. If you transfer crypto out of your Fidelity Crypto account to another wallet or exchange, Fidelity may charge a withdrawal fee; check their current fee schedule before moving funds.

How Fidelity Crypto differs from other Fidelity accounts

Your Fidelity Crypto account is not covered by SIPC (Securities Investor Protection Corporation), the insurance that protects most Fidelity brokerage accounts if the firm fails. Cryptocurrency is not classified as a security, so standard brokerage protections do not apply. Fidelity does hold customer crypto in segregated accounts, but the legal protections are different from stocks or bonds.

You also cannot use Fidelity Crypto to fund retirement accounts like IRAs or 401(k)s. If you want to hold crypto inside a tax-advantaged retirement account, you would need to use a different provider that specializes in self-directed IRAs or crypto IRAs. Fidelity's regular brokerage accounts also do not allow cryptocurrency purchases.

Selling crypto and moving money out

When you sell Bitcoin or Ethereum on Fidelity Crypto, the proceeds go back into your Fidelity Crypto cash balance. From there, you can transfer the money back to your linked bank account via ACH, which takes one to three business days. You can also leave the cash in your Fidelity Crypto account and use it to buy more crypto.

If you want to move your actual Bitcoin or Ethereum to a different exchange or personal wallet, you can withdraw it. Fidelity will charge a network fee for this withdrawal, which covers the cost of processing the transaction on the blockchain. The fee amount depends on network conditions and the cryptocurrency you're withdrawing.

Tax reporting for Fidelity Crypto

Every time you buy or sell crypto on Fidelity, that's a taxable event. You owe capital gains tax on any profit when you sell, and you may owe income tax if you received crypto as payment for something. Fidelity Crypto provides transaction history and tax documents, but you are responsible for reporting all crypto activity to the IRS on your tax return.

Keep records of every buy and sell, including the date, amount, price, and any fees paid. If you're unsure how to report crypto on your taxes, consult a tax professional who understands cryptocurrency. The IRS treats crypto as property, not currency, which affects how gains and losses are calculated.

Frequently Asked Questions

Can I buy crypto inside my Fidelity IRA or 401(k)?

No. Fidelity Crypto is a separate, non-retirement account. Your IRA and 401(k) cannot hold cryptocurrency through Fidelity. If you want crypto in a retirement account, you would need to open a self-directed IRA with a provider that supports digital assets.

What happens to my crypto if Fidelity goes out of business?

Fidelity holds customer crypto in segregated accounts separate from company assets, but cryptocurrency is not covered by SIPC insurance like stocks and bonds are. Your crypto would likely be returned to you, but the legal protections are weaker than traditional securities. This is an important risk to understand before investing.

Can I set up automatic purchases on Fidelity Crypto?

Fidelity Crypto does not currently offer automatic recurring purchases or dollar-cost averaging features. You must manually buy each time you want to add to your position. Some other crypto platforms offer this feature if it's important to your strategy.

Is Fidelity Crypto the same as Fidelity's Bitcoin mutual fund?

No. Fidelity offers a Bitcoin mutual fund (FBTC) that you can buy inside a regular Fidelity brokerage account, and it's covered by SIPC. Fidelity Crypto is a separate platform where you own the actual Bitcoin or Ethereum directly. They serve different purposes depending on whether you want to own crypto directly or through a fund.

How long does it take to buy crypto after I fund my account?

Once your bank transfer arrives in your Fidelity Crypto account (one to three business days), you can buy immediately. The actual purchase happens in seconds at market price. You own the crypto right away, though it may take time to transfer it out if you choose to move it elsewhere.