<mediadc-video-embed data-state="{"cms.site.owner":{"_ref":"00000161-3486-d333-a9e9-76c6fbf30000","_type":"00000161-3461-dd66-ab67-fd6b93390000"},"cms.content.publishDate":1654550673595,"cms.content.publishUser":{"_ref":"0000017f-e2f4-de00-a7ff-e7fff8030000","_type":"00000161-3461-dd66-ab67-fd6b933a0007"},"cms.content.updateDate":1654550673595,"cms.content.updateUser":{"_ref":"0000017f-e2f4-de00-a7ff-e7fff8030000","_type":"00000161-3461-dd66-ab67-fd6b933a0007"},"rawHtml":"
var _bp = _bp||[]; _bp.push({ "div": "Brid_54526892", "obj": {"id":"27789","width":"16","height":"9","video":"1025351"} }); ","_id":"00000181-3a87-d421-ada5-7edfba8a0000","_type":"2f5a8339-a89a-3738-9cd2-3ddf0c8da574"}”>Video EmbedOne of the world’s largest asset managers will soon allow customers with 401(k) accounts to invest a portion of their funds in bitcoin.
Fidelity Investments recently announced the move, which comes after years of increasing institutional acceptance of the cryptocurrency space. Workers who wish to invest some of their retirement savings in bitcoin will have their funds held in Fidelity’s new digital asset account, according to the company.
Fidelity, which manages plans for some 23,000 employers, will allow those employers to decide whether they will permit their employees the option of taking advantage of the new offering. Fidelity put an operational cap of 20% for investments in bitcoin within 401(k)s, although participating workplaces will determine the investment cap.
“As a leader in digital assets, we are thrilled to be the first to offer employers exposure to bitcoin for the core lineup of 401(k)s that reflects our commitment to meeting their evolving needs and our belief in the promise of blockchain technology for the financial industry’s future,” said Dave Gray, Fidelity’s head of workplace retirement offerings and platforms.
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The move comes at a particularly volatile time for cryptocurrency investors.
Bitcoin peaked last year at about $69,000 and is now down more than 53% from its November highs. Bitcoin has dropped more than 34% since the start of the year and is off nearly 18% from the day that Fidelity first announced the 401(k)-bitcoin plan.
Traditional stocks have tumbled this year, as the Federal Reserve raises interest rates to combat inflation and war rages in Ukraine.
In economic downturns, investors tend to avoid or offload risky investments in favor of safer and more stable stores of value. Bitcoin and other cryptocurrencies are considered risky investments for many, given the relative youth of the asset class.
Still, earlier this year, Goldman Sachs became the first major U.S. bank to trade cryptocurrencies over the counter, adding more institutional credibility to the digital assets. Ray Dalio’s famed Bridgewater Associates also said it plans to back its first crypto fund.
MicroStrategy will be the first company to offer Fidelity’s digital asset account in its retirement plan, according to Fidelity.
“MicroStrategy looks forward to working with Fidelity to become the first public company to offer their employees the option to invest in bitcoin as part of our 401(k) program,” said Michael Saylor, CEO of MicroStrategy.
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“Teaming with companies like Fidelity that are innovating in bitcoin for corporations is important to us, as is furthering the development of the bitcoin ecosystem for institutional investors,” he added.
Fidelity is actively offering the digital assets account to clients, although the first account won’t be live for a few more months due to implementation timing.
