Fidelity Plans To Support Bitcoin Investments For 401K Retirement Accounts
Welcome back to the Tribe! In this post we are going to take a look at the recent announcement that Fidelity plans to support Bitcoin. Some people might not remember, but it was not that long ago where companies like Fidelity were laughing at crypto and calling it all fake. It is funny how things have changed over only a few years.
Nothing should be considered investment or financial advice. Enjoy the ride!
Fidelity Plans To Support Bitcoin
Fidelity expands its offerings with a Crypto retirement product. American employers can designate a portion from their 401K retirement accounts to Bitcoin. Fidelity will implement a 20% allocation cap for this option. The retirement plan faces stiff opposition from the U.S. Labor Department. However, Fidelity insists the department does not have jurisdiction over the matter and a major institution has already agreed to the initiative.
Up To 20% Of 401K Retirement Savings Plans Allocated To BTC
Fidelity Investments, a major American retirement plan provider will allow employees to save in Bitcoin using their 401k accounts. The option will be available later in 2022, per the report.
Speaking with WallStreetJournal, Fidelity’s Head of Workplace Retirement Products Dave Gray highlighted a massive increase in the demand for crypto assets from traditional investors. According to Gray, investors want more exposure to blockchain-powered currencies like Bitcoin. Gray said:
“We started to hear a growing interest from plan sponsors, organically, as to how could Bitcoin or how could digital assets be offered in a retirement plan. We fully expect that cryptocurrency is going to shape the way future generations think about investing for the near term and long term.”
Fidelity’s latest product expands the assets available to employers to choose for their retirement plans. In a bid to match clients’ appetites, Americans can now add the world’s largest cryptocurrency to their portfolio.
However, employers will retain a level of control over how much of the 401K account is earmarked for digital assets. Gray disclosed that the allocation is capped at 20%. Also, maintenance fees of around 0.75% – 0.9%.
MicroStrategy On Board With Fidelity’s BTC 401K Accounts
Since Fidelity launched a virtual asset department in 2018, the investment heavyweight has supposedly solidified its position as a leader in the industry and one of the early adopters of cryptocurrencies within the mainstream financial sector.
As of the time of writing this report, Fidelity boasts more than $4 trillion in assets under management (AUM) and is currently the fourth largest asset manager in the world. Also, Fidelity dominates the market for company-sponsored retirement plans and controls 401K accounts with over $2.4 trillion in assets.
With its massive 401K AUM portfolio, around 75% of the retirement account market is managed by Fidelity.
However, the investment giant is not the first to pursue BTC retirement savings. A competitor, ForUsAll, teamed up with major crypto exchange Coinbase back in June 2021. The pair also planned to provide retirees with exposure to Bitcoin investment products.
Notably, digital assets outfit and massive BTC holder MicroStrategy aligns with Fidelity’s plan to offer Bitcoin 401k plans. Michael Saylor’s firm has reportedly agreed to the initiative and will allow employees to make allocations.
Fidelity is also in talks with other institutions in a bid to drive the adoption of the crypto investment package.
Other News – Central African Republic Approved Bitcoin
Bitcoin becomes an acceptable means of payment for the first time in the continent of Africa. Legislators from the Central African Republic recently approved the bill to legalize crypto in the country. The country joins El Salvador in a shortlist of countries with Bitcoin as legal tender.
Fidelity Plans To Support Bitcoin News
Thanks for reading our post on Fidelity plans to support Bitcoin. Clearly companies are continuing to see the advantages of holding and buying crypto long-term. This trend should continue in the coming years giving Bitcoin more and more utility.
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