The biggest game in town is giving cryptocurrency a seat at the table.
Fidelity Investments said it will allow investors to place a Bitcoin account in their 401(k)s.
The company said Fidelity’s Workplace Digital Asset Account is the industry’s first offering that will enable people to allocate a portion of their retirement savings to bitcoin through its basic 401(k) investment plan.
The account fee will be between 0.75% and 0.90% of assets, depending on a number of factors including the business owner and the amount invested.
Fidelity has $2.4 trillion in 401(k) assets in 2020, or more than a third of the market, according to research firm Cerulli Associates.
The investment firm said there were about 600,000 401(k) plans in 2020, with about 60 million active participants and millions of former employees and retirees.
The company said the additional trading fee, which has not yet been disclosed, will be “priced competitively”.
MicroStrategy, the business intelligence company founded by billionaire and bitcoin evangelist Michael Saylor, plans to be the first employer to introduce Fidelity’s digital asset account into their retirement plan.
MicroStrategy is looking forward to working with her Tweet embed To become the first public company to offer its employees the option to invest in bitcoin as part of our 401(k) program,” Saylor tweeted.
very bold statement
Saylor said in Tweet follow This is like Tweet embed It continues to be a leader in corporate bitcoin, and we plan to provide our employees with the option to invest in it # bitcoin As part of their 401K portfolio. $ mstr“
“Congratulations on securing a safe and stable pension for your employees”, one person replied.
“Looks like this is the beginning of mass adoption!” another person hung.
“Fidelity is allowing more than 23,000 companies enrolled in its 401(k) program to include a Bitcoin account option for their employees, a very bold statement that will help solidify the growing acclaim for digital currency investments,” said CEO Igor Volutkovich. EVODeFi Manager.
Volutkovich said that while Fidelity itself has had a good time in terms of crypto investments over the years, “bringing it closer to the average worker is very positive news for the crypto industry as this move could significantly lead to tons of retail investors coming in.” New to the world of Bitcoin.
“With Fidelity moving forward in this regard, it is likely that other 401(k) providers will make a relevant move because boosting bitcoin can give Fidelity a very formidable competitive advantage that many will seek to capitalize on,” he said.
While existing platforms allow individuals and the self-employed to invest in cryptocurrency within various IRAs, “Fidelity is leading the way in adding bitcoin to employer-sponsored retirement,” said Laura Adams, MBA, a personal finance and cryptocurrency expert at Finder.com. plans.”
“This is important because it is one of the most well-known investment firms, and we are likely to see a significant increase in workers adding to our 401(k) later this year,” she said. “Having more options on your business investment list is good news for consumers who want to have a diversified retirement portfolio inside a tax-advantaged account.”
More investment firms may follow
If Fidelity’s bitcoin offering is popular with retirement plan participants, Adams said more investment firms may add it and altcoins, such as ethereum and solana, to their roster.
“While employers may limit the amount of cryptocurrency eligible employees can purchase, it is an excellent way for American workers to learn about bitcoin, build wealth, and reduce taxes,” Adams said.
Bitcoin has seen some dramatic movement in the past several months, reaching a high of $69,000 in November, and falling below $34,000 in January.
Last month, the US Department of Labor issued a statement on resistance to compliance, advising “plan insurers to exercise extreme caution before they consider adding a cryptocurrency option to their 401(k) plan investment list for plan participants.”
“Extreme volatility can have a devastating effect on participants, especially those approaching retirement and those with a large allocation to crypto.”
Fidelity said its 2021 study found that 30% of US institutional investors surveyed would prefer buying an investment product that contains digital assets.
In addition, the company estimates that approximately 80 million individual American investors currently own or invest in cryptocurrency.
Fidelity began its exploration of blockchain technology in 2014 with bitcoin mining, and in 2018 launched its first commercial offering, Fidelity Digital Assets, a platform that provides custody and trade execution to institutional investors of digital assets.
In 2020, digital asset management firm Fidelity launched a private bitcoin fund that is currently available to accredited investors.
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This story was originally published April 26, 2022 11:26 am.