Fidelity ‘Investment Giant’ Might Offer Bitcoin in Retirement Plans

According to The Wall Street Journal, Fidelity Investments plans to allow investors to put a portion of their 401(k)s into Bitcoin later this year.

Fidelity, which oversees employee benefit plans for roughly 23,000 companies, is slated to become the first big retirement plan provider to allow Bitcoin exposure in retirement funds. In its retirement services sector alone, the corporation manages $2.7 trillion in assets.

“There is a need for a diverse set of products and investment solutions for our investors,” said Dave Gray, Fidelity’s head of workplace retirement offerings and platforms, per the report. “We fully expect that cryptocurrency is going to shape the way future generations think about investing for the near term and long term.”

Investors will be able to devote up to 20% of their retirement savings to Bitcoin, although plan sponsors may choose to lower that limit at their discretion. Gray is claimed to have stated that the offer would be confined to Bitcoin and would not consider other cryptocurrencies at the outset.

The Boston-based firm’s move comes after the US Department of Labor (DOL) issued a warning about including Bitcoin exposure in retirement plans. Furthermore, the new product’s adoption will be largely determined by companies’ willingness to include Bitcoin in their employees’ retirement funds.

MicroStrategy, a business analytics firm noted for being the largest corporate Bitcoin holder, has already committed to the ambitious objectives.

Fidelity was one of the first large financial institutions to dabble in cryptocurrency and it began mining Bitcoin in 2014. It established a separate cryptocurrency unit in October 2018. Fidelity also entered the cryptocurrency custody market in 2019, which CEO Abigail Johnson praised as a “huge success.” Its Canadian affiliate became the first regulated Bitcoin custodian in Canada last November.

Image Credit: Shutterstock