Fidelity to Offer BTC Exposure to 401(k) Savings Accounts

Financial services firm Fidelity Investments is planning to allow customers to put Bitcoin (BTC) into their 401(k) retirement accounts later this year, The Wall Street Journal reported on 26 April.

According to the publication, the move will enable over 23,000 U.S.-based companies to allow their employees to allocate up to 20% of their 401(k) portfolio in Bitcoin, the largest cryptocurrency in the world. Fidelity’s decision to include BTC — and later down the line other crypto assets — as a retirement investment option was due to increasing demand from their clients. The head of workplace retirement offerings and platforms at Fidelity Investments, Dave Gray, said in a statement:

“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. We fully expect that cryptocurrency is going to shape the way future generations think about investing for the near term and long term.”

The 401(k) retirement accounts in the U.S. are company-sponsored, and allow employees to make contributions toward their own retirement, while the employer could match that contribution. Employees can choose to invest their contributions into funds of their choosing, while also receiving a tax break.

While Fidelity is not the first retirement plan provider to offer access to BTC, it is one of the larger companies on the market. Back in 2020, research form Ceruli Associates had estimated that the company held around $2.4 trillion in 401(k) assets, which at the time was more than a third of the entire market. The company noted it is now in discussions with employers about the change, and that MicroStrategy has already agreed to the BTC investment plan.