ForUsAll administers 401(k) plans for 400 clients and it is not clear how many of these have signed up for the current crypto offerings with Coinbase.
Publicly listed American cryptocurrency exchange Coinbase Global Inc (NASDAQ: COIN) has partnered with ForUsAll, a 401(k) provider to bring crypto-related investments to the latter’s clients. The product birthed by the duo of Coinbase and ForUsAll is dubbed Alt 401(k) and will let employers provide alternative investments option within 401(k) plans.
The proliferation of digital assets and the interest this new form of money has generated has gained momentum around the globe. The Bitcoin (BTC) and altcoins that were the go-to asset for only a few proponents a few years have now become highly sought after by retail and institutional investors today. A major worry that has slowed down the pace of this embrace has been the volatility of the asset class, and the absence of a broad regulation to protect investors.
These concerns are now alleviated with new products being churned out from regulated firms like Coinbase. Through the Alt 401(k) offering, employees can invest up to 5% of their total portfolio into cryptocurrencies. In addition, subscribers to the ForUsAll 401(k) plans can also bid, hold, and sell more than 50 cryptocurrencies.
“The reality is that alternative asset classes which increasingly include small allocations to cryptocurrency have become an important part of many institutional portfolios,” said David Ramirez, ForUsAll’s Co-Founder and Chief Investment Officer, in a statement. “Without access to these portfolio building blocks and expert help to prudently use these asset classes, the average American may be at a structural disadvantage.”
ForUsAll administers 401(k) plans for 400 clients and it is not clear how many of these have signed up for the current crypto offerings with Coinbase.
Coinbase 401(k) Investments: A Room to Diversify Employer’s Portfolio
Investment managers are often against the concentration of investor’s portfolios and the Coinbase 401(k) investments are billed to aid employers in diversifying their passive assets. 401(k) plans are often skeptical about unregulated offerings and the offering from ForUsAll will be a dive into unchartered territories.
“Alternative investments, including small allocations to cryptocurrency can help improve portfolio diversification and expected returns. However, the volatility and the complexity of these asset classes make prudent education and advice for employees essential,” Ramirez added.
The offering did not come with an obligation for either client employers or their employees to subscribe, however, those who might have eyes to get engaged with the burgeoning world of cryptocurrencies can explore a flexible and safe option to explore the new space. ForUsAll was established in 2012 and currently has about $1.7 billion in retirement-plan assets.
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