A Fidelity Investments location in New York.
Scott Mlyn | CNBC
Fidelity Investments said on Tuesday that it will offer investors the option to put bitcoin in their 401 (k) s, making it the first provider to offer crypto for retirement savings.
The crypto offer will be available to 23,000 employers using Fidelity to manage their retirement accounts by mid-2022. With $ 11.3 trillion in assets under administration, Fidelity is the country’s largest pension scheme provider, and its decision could make crypto even more popular and mainstream.
“There’s growing interest from vehicle plan sponsors enabling them to give their employees access to digital assets in defined contribution schemes, and again from individuals with an appetite for incorporating cryptocurrencies into their long-term investment strategies,” said Dave Gray. manager of workplace pension offers and platforms at Fidelity Investments.
Cloud and intelligence firm MicroStrategy will be the first employer to offer bitcoin in their retirement plan. The Wall Street Journal reported the news earlier Monday morning.
Still, regulators have called for caution against involving cryptocurrencies in 401 (k) s. Just last month, the Department of Labor asked the plan’s administrators to “exercise extreme caution” before considering adding a cryptocurrency option to a 401 (k) plan investment menu for planholders.
The Department of Labor mentioned concerns about speculation, volatility as well as high valuation. Meanwhile, it warned of major problems with detention and registration, saying that simply losing or forgetting a password could result in the loss of the asset forever.
Fidelity said the Digital Assets Account is a custom plan account that houses bitcoin and short-term money market investments to provide the necessary liquidity to the account to facilitate daily transactions on behalf of the investor.
Bitcoin in the DAA will be held on the Fidelity Digital Assets custodian platform to ensure institutional security, Fidelity said.