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More investors will soon be able to add bitcoin to their 401(k) accounts.
Fidelity Investments announced plans Tuesday to begin offering bitcoin as an investment option in its 401(k) retirement plans starting later this year.
It’s a big move for Fidelity, which oversees more than $2.7 trillion in 401(k) plan assets — and a significant milestone in the mainstreaming of cryptocurrency.
The retirement giant said employer interest spurred the move.
“There is growing interest from plan sponsors for vehicles that enable them to provide their employees access to digital assets,” said Dave Gray, head of workplace retirement offerings at Fidelity Investments.
More retail investors also see bitcoin playing a bigger role in their long-term investment strategy.
According to a March 2022 survey by The Penny Hoarder, 69% of crypto investors said they would invest some of their retirement funds into cryptocurrency if given the opportunity.
Fidelity will give the 23,000 employers it works with the option to add so-called digital assets accounts to their 401(k)s, and workers will pay between 0.75% and 0.90% in annual fees for these special bitcoin accounts.
Employers will also set limits on how much of their savings a participant can earmark for bitcoin, up to a 20% cap.
Chris Kline, COO and co-founder of Bitcoin IRAsaid Fidelity’s announcement could trigger “a domino effect” among mainstream retirement plan providers and custodians.
“As consumer demand grows, more providers will jump in,” said Kline, whose company began offering cryptocurrency within individual retirement accounts back in 2016. “It’s going to take a powerhouse like Fidelity to get other big players on board.”
Consumers have been able to invest in cryptocurrency using self-directed IRAs for years, but Fidelity’s move streamlines the process for workers, who will now be able to take advantage of employer contribution matches and automatic payroll…
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