Fidelity to Allow Bitcoin in 401(k) Retirement Savings Plans
Investment company Fidelity has decided to allow its 401(k) retirement savings plans to include Bitcoin, with other cryptocurrencies expected to be supported in the future.
As The Wall Street Journal reports, Fidelity is expected to allow up to 20% of a 401(k) investment to be held in Bitcoin. However, it's up to the 23,000 or so companies using Fidelity's platform to administer retirement plans to make a final decision on the allowed upper limit for cryptocurrency. It could therefore be set much lower at some organizations, while others may choose not to allow it at all.
"We fully expect that cryptocurrency is going to shape the way future generations think about investing for the near term and long term," says Dave Gray, Head of Workplace Retirement Offerings and Platforms at Fidelity.
Fidelity manages assets worth over $4.5 trillion and generates annual revenue that topped $24 billion last year. It's had a stake in crypto markets for some time, and launched a separate entity back in 2018 dedicated to institutional cryptoasset custody and cryptocurrency trading.
Last year, the company also launched a Bitcoin-based ETF and mutual fund in Canada, allowing investment dealers, portfolio managers, and investment funds to more easily trade cryptoassets.
The US Department of Labor is taking a more cautious approach to the use of cryptocurrency in 401(k) plans. Last month, it published compliance assistance warning plan fiduciaries to "exercise extreme care as they consider cryptocurrencies." The document details five key reasons as to why such investments "present significant risks and challenges," not least of which is the speculative and volatile nature of crypto investments.
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