Investors can use part of their savings to invest in the world’s largest cryptocurrency, if their employers allow.
U.S.-based financial services firm Fidelity Investments will allow investors to put bitcoin (BTC) into their 401(k) retirement savings accounts later this year, the firm said on Tuesday.
Fidelity, which manages employee benefit programs for nearly 23,000 businesses, is set to become the first major retirement-plan provider to allow bitcoin exposure in retirement accounts. The company has $2.7 trillion in assets under management in its retirement services division alone.
Fidelity's offering may be one of just a few for a while, given the substantial concerns about the riskiness of cryptocurrencies. The U.S. government last month warned the retirement industry to exercise "extreme care" when doing something like this, highlighting how inexperienced investors may not appreciate just how volatile cryptocurrencies can be, among other concerns.
Bitcoin had five days in the last year where it plunged by at least 10%. The stocks in the S&P 500, meanwhile, had only two such drops in the last 50 years. Beyond its volatility, there's still fundamental disagreement about how much a bitcoin is worth, or even if it's worth anything at all.
Though Fidelity is best known for its vast retirement business, it was one of the earlier entrants in the cryptocurrency space. In 2018, it began offering trading and custody of digital assets for large institutional customers, and in 2020, it introduced a private Bitcoin fund for so-called accredited investors. Its Fidelity Advantage Bitcoin E.T.F. became available late last year in Canada.