Fidelity said it would allow its participants to put a slice of their retirement money into Bitcoin—if their employers are willing to allow it. This will enable millions of people to directly invest in Bitcoin without having to create an account on a cryptocurrency exchange.
According to research firm Cerulli Associates, Fidelity, which held $2.4 trillion in 401(k) assets in 2020, said it was introducing a digital assets account to hold Bitcoin. The account fee will range from 0.75% to 0.90% of assets, depending on several factors, including the employer and the amount invested. The additional trading fee, as yet undisclosed, will be “price-competitive,” the firm said.
“We started to hear a growing interest from plan sponsors, organically, as to how could Bitcoin or how could digital assets be offered in a retirement plan,” Dave Gray, head of workplace retirement offerings and platforms at Fidelity Investments, said in an interview.
Gray said that MicroStrategy, a business intelligence company that actively invests in Bitcoin, has already signed a contract, and Fidelity is in talks with other employers.
Fidelity said the digital assets account will become widely available in mid-2022. It will be integrated into the 401(k) investment menu, just like more traditional mutual funds; investors may elect, for example, to dedicate a certain percentage of their contributions to the Bitcoin account. That percentage will be limited: The employer will determine the ceiling, but the platform won’t permit allocations of more than 20 percent, although that number could change.
Fidelity is one of the first participants in the cryptocurrency market. In 2018, it began offering trading and custody of digital assets to large institutional clients, and in 2020 it introduced a private Bitcoin fund for so-called accredited investors. Its Bitcoin ETF Fidelity Advantage became available late last year in Canada.
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About the Author
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.