This story first ran in Financial Advisor IQ's sister publication, Ignites.

Fidelity's foray into Bitcoin investing remains controversial not only at the Labor Department but with Fidelity itself, but the firm is "doubling down" on the business, according to Chief Executive Abigail Johnson.

Speaking in a Q&A at the Consensus 2022 cryptocurrency conference in Austin last month, Johnson reiterated her commitment to Fidelity's expansion in the new investment sector, despite skepticism among colleagues at Fidelity, regulatory pushback and the recent downturn in crypto valuations.

"I figure this is my third crypto winter; there’s been plenty of ups and downs, but I see that as an opportunity," she said. "If you believe that the fundamentals of a long-term case are really strong, when everybody else is dipping, that's the time to double down and just dive extra-hard into it."

Looking back on Fidelity's progress so far in the crypto space, Johnson said some at the firm were wary of the push, and some still remain so.

"This was very controversial in the organization, and it's becoming a little more accepted now, but, you know, a lot of people are very confused, and you kind of can't blame them," she said.

Early on, Fidelity's finance department actually rejected a plan devised by Johnson to spend $200,000 on Bitcoin mining equipment, Johnson said.

"People said, 'What is this? You want to buy a bunch of boxes from China?'" she said.

Longer-tenured employees have become conditioned to work within clearly defined regulatory guidelines and have been hesitant to move forward without them, Johnson said.

"Financial services is a super-highly regulated business, and if you've been in it for a long time, you're used to having a really tight road map to the rules," she said. "It makes people feel unstable when they start moving into a space where, at some higher level of settling transactions and moving money and value creation, [it] is the same, but kind of everything else is different, there's no rule framework, things aren't really sure — it makes people feel uncomfortable."

After piloting Bitcoin ventures in-house, Fidelity launched its Fidelity Digital Assets custody and trading service in the fall of 2019. The following year, it rolled out a non-registered Bitcoin fund and last year filed to launch a Bitcoin ETF.

In April, the firm took its biggest step yet, announcing plans to open access to Bitcoin in its 401(k) plans. Anticipating Fidelity's announcement, the Labor Department issued guidance in March recommending that plans avoid cryptocurrency investments, and then, after Fidelity's announcement, said it had "grave concerns" over Fidelity's action.

Johnson said she was surprised by the reaction.

"I would have never thought that we would have gotten so much attention for bringing a little bit of Bitcoin to a little bit of the 401(k) business," Johnson said. “A lot of people, now that they've heard about it, have been asking, so I've been happily surprised at the amount of positive feedback that we've gotten on that."