Fidelity Investments is the largest 401(k) provider in the United States. Just this month, the company announced that it will be the first to offer customers to deal with it Bitcoin (BTC 1.25%) Through her 401(k) plans.
Fidelity has 20.4 million customers and manages approximately $2.7 trillion in assets. Now these clients can allocate a portion of their portfolio to the world’s leading cryptocurrencies. It’s a move most people were expecting in the end but it has finally arrived.
By showing retail investors Bitcoin, Fidelity has proven that this isn’t just a fad. Sincerity knows that there is money to be made in this market. Ultimately, Fidelity’s goal is to remain competitive as a 401(k) provider by offering customers new and innovative products. The company is in it for the money, like all of us. The better the results, the higher the profit.
The announcement of offering clients exposure to Bitcoin proves that Fidelity believes that this market has untapped potential. Inevitably, other competitors to Fidelity will start offering a similar Bitcoin offer to their customers. companies like Charles SchwabEdward Jones and Vanguard will have to keep up with demand or risk losing customers to Fidelity.
If this situation happens, it will be great news for bitcoin investors. As more participants gain exposure to an asset, the asset becomes less volatile. The current Bitcoin market is volatile for several reasons. One of them is because it is a developing asset. Volatility is part of the maturation process as investors determine the true purpose of Bitcoin.
Allocating Bitcoin from tens of millions of 401(k) wallets would be one such purpose that helps reduce volatility. Therefore, Bitcoin can go from being a volatile speculative investment to being a trusted part of many retirement plans.
More big money on the way
To find more evidence of this movement, it may be useful to see what some of the world’s largest accounting firms are doing to prepare themselves for customers wanting bitcoins.
KPMG, one of the top four accounting firms, has been at the forefront of innovation revolving around digital assets. It announced in February 2022 that its Canadian subsidiary would buy Bitcoin. This step has been described as the first step to understanding digital assets further so that it can eventually provide guidance to its clients.
And their clients are among the most profitable companies in the world. KPMG manages books for more than 20% of Fortune Global 500 companies.
The managing partner of KPMG Canada, Benjie Thomas, summed it up best: “This investment reflects our belief that institutional adoption of crypto-assets and blockchain technology will continue to grow and become a regular part of the asset mix.”
keep it simple
Microeconomic factors may not be favorable at the moment, but the macroeconomic outlook is great. Institutions are coming, and how much money will flow into Bitcoin history has yet to be seen.
Institutional investors have unimaginable amounts of capital. It pales in comparison to retail investors. Fortunately, retail investors can follow the bread crumbs left by institutional giants preparing for bitcoin to become a more common asset.
These new sources of funding will not be reflected in the price of Bitcoin immediately. Instead, like many trends, they seem to quickly become mainstream without warning and then remain forever. But as they take their time, retail investors can stay ahead of the game with exposure to bitcoin at prices that are likely to dwindle in the coming years.
If they’re grooming themselves, so are we.