Fidelity to allow a large number of retirement savings accounts to invest in Bitcoin

If approved, retirement savers will be able to allocate 20% of their savings portfolio to Bitcoin without the need to open a crypto exchange account. Fidelity Investments, a retirement plan provider based in the United States, will reportedly allow 401(k) retirement saving account holders to directly invest in Bitcoin (BTC).

Later this year, the new Bitcoin retirement investment plan will go live. According to The Wall Street Journal, it will allow over 23,000 Fidelity-affiliated companies to administer their retirement accounts and offer Bitcoin investment options to their customers.

If the proposal to allocate BTC to their savings account is approved by employers, retirement savers will be able to invest up to 20% of their portfolio in Bitcoin. Fidelity is currently in talks with several of the companies that use its services, and MicroStrategy is said to have already agreed to the BTC investment plans. 

The case for investing in Bitcoin through retirement savings accounts is not new. Earlier in June 2021, ForUsAll, another retirement plan provider, partnered with Coinbase to provide BTC exposure to its retirement savings account holders. However, Fidelity’s interest in the sector would undoubtedly push the concept into the mainstream.

Fidelity Investments’ Dave Gray, head of workplace retirement offerings and platforms, stated that the decision to offer Bitcoin exposure to 401(k) plan holders was based on high client demand. He stated:

“We began to hear a growing interest from plan sponsors, organically, about how Bitcoin or digital assets could be offered in a retirement plan.” We fully expect a cryptocurrency to shape how future generations think about investing in the short and long term.”

Gray also stated that, in addition to its initial support for Bitcoin, the company would add other crypto assets to the investment option based on client demand.

Fidelity, which manages over $4 trillion ( R 63.3tn) in assets, was one of the first mainstream financial institutions to invest in cryptocurrency, launching its digital asset arm in 2018. Since then, the investment firm has been one of the most vocal supporters of Bitcoin.

Nonhlanhla P Dube

Nonhlanhla P Dube is a senior news reporter at Rateweb. Nonhlanhla is a student of International Relations at the University of South Africa. She reports primarily on personal finance and economics. You can contact her directly by email at [email protected]

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