Key takeaways:
- Asset management giant Fidelity will start offering access to Bitcoin-holding 401(k)s later this year
- Fidelity will reportedly charge between 0.75% and 0.90% for the service and won’t allow clients to allocate more than 20% of their retirement money into Bitcoin
- Fidelity has significantly expanded its lineup of crypto products and services in recent months, launching BTC spot and metaverse ETF
Fidelity will alow employees to put their retirement money into Bitcoin
Fidelity Investments, one of the largest asset management companies and the US’s largest 401(k) plan providers, will reportedly give certain companies the option to offer their employees to save money for retirement in Bitcoin-holding 401(k)s, according to a recent NYT report.
The new digital assets accounts will become available later this year. Fidelity will reportedly charge between 0.75% and 0.90% for asset management. Employees will be free to choose how big of an allocation to Bitcoin they would like, however, Fidelity won’t allow more than 20% allocations, at least for the time being.
The crypto-oriented 401(k) offering comes as a response to a growing number of people who were interested in investing a part of their retirement money into Bitcoin. Head of workplace retirement offerings and platforms at Fidelity Investments Dave Gray explained:
“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.”
Fidelity’s decision to offer Bitcoin exposure via highly regulated investment vehicles such as pension plans has immediately drawn the attention of the regulators. In a recent compliance release, the Labor Department alluded to the fact that pension funds must be invested in “prudent” options, and all but exempted crypto from being eligible for investment. “These investments present significant risks and challenges to participants’ retirement accounts, including significant risks of fraud, theft and loss,” the agency wrote.
Fidelity has greatly expanded its offering of crypto-related products and services in recent months. At the tail end of last year, the asset management giant launched its first-ever Bitcoin spot ETH in Canada. Earlier this year, the company began offering exposure to the metaverse and various crypto projects via its FDIG and FMET ETFs.
