Retirement giant Fidelity said Tuesday that it’s launched a way for workers to put some of their 401(k) savings and contributions directly in bitcoin, potentially up to 20%, all from the account’s main menu of investment options. Fidelity said it’s the first in the industry to allow such investments without having to go through a separate brokerage window, and it’s already signed up one employer that will add the offering to its plan later this year.
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.
In addition to being able to transfer up to 20% of their account balances to a Bitcoin account in Fidelity’s trading and custody platform, workers at companies that sign up for the new offering will also be able to invest up to the same amount of each payroll contribution to bitcoin.
As mentioned by NPR: “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”.
Still, regulators have urged caution against involving cryptocurrencies in 401(k)s.
The Labor Department warned in it´s compliance release: ” “These investments present significant risks and challenges to participants’ retirement accounts, including significant risks of fraud, theft and loss,”