Bitcoin gradually has made its way into society in all aspects, but its main use has been as an investment vehicle. Although there has been some resistance to the use of cryptocurrencies in traditional financial instruments, this trend is slowly changing. Fidelity Investments has just announced that employees will be allowed to use Bitcoin as a method of investing in their 401k.
Bitcoin as a Retirement Option
One of the most sought-after investment options for Americans is the 401k. They tend to be dominated in stocks that appreciate with time, while account holders still contribute to the account. With the advent of cryptocurrency Bitcoin as a leading investment option, account holders began to explore other options for diversifying their 401k investments.
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Fidelity Investments announced it will allow employees to add cryptocurrency to their retirement accounts. Fidelity will be the first company in the country to allow employees to add Bitcoin to their retirement plans. The 401k is currently the country’s largest retirement-plan provider and hosts the majority of the market share. Fidelity currently manages retirement plans for approximately 23,000 organizations. The company will also offer bitcoin to its employees.
BTC at $40,000| Source: BTCUSD on TradingView.com
Fidelity revealed that they will let employees put 20% of their pension in bitcoin. It will go into effect in the latter part of 2019. The company currently has a market share of more than one third, with an estimated $2.4 trillion worth in 401k assets.
The fees are charged at a range of 0.75 – 0.90%. The employer as well the amount paid to the account will determine the fees. Fidelity has yet to reveal the trading fee.
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Our investors need a variety of investment products. We fully expect that cryptocurrency is going to shape the way future generations think about investing for the near term and long term.” – Head of workplace retirement offerings and platforms at Fidelity.
The U.S. Labor Department issued a directive that expressed concern about adding cryptocurrency options into retirement plans. The reason for this was that digital assets are highly volatile and speculative.
Nevertheless, it seems that Fidelity’s offering is already starting to catch on as MicroStrategy is rumored to have already signed on to this plan.
Featured image taken from Investopedia. Chart from TradingView.com
