Fidelity investment has indicated it will start allowing investors to add Bitcoin (BTC) in their 401(k)s, making it the first major retirement-plan provider to do so.
Fidelity Gives Approval for Bitcoin Use in the Retirement Plan
Although employees will not be allowed to start adding crypto assets to their accounts immediately, the same functionality will be made available later in the year for all companies using Fidelity for administration of their retirement plans.
This endorsement suggests that cryptos are becoming the mainstream, but it is not yet clear whether employers will embrace it.
The move by Fidelity comes in the backdrop of the US Department of Labor’s concerns about the use of cryptos in retirement plans. The stock markets are also finding it uneasy, with S&P 500 SPX falling by 2.81%, with 10% of the drop happening in 2022. This is mainly caused by the growing interest rates. When it comes to Bitcoin, the loss has been huge: a 40% drop since November 2021.
According to Dave Gray, the head of Workplace Retirement Offering and Platforms in the Boston-based firm, they expect cryptos will shape the way future generations think about investing in both short and long-term.
According to Fidelity, savers would be allowed to put a maximum of 20% of their nest eggs in Bitcoin. However, the threshold might be pushed lower by sponsors. At first, they wanted to limit the system to Bitcoin, but expect that other crypto assets will be added in the future.