By
Bena Ilyas
April 25th, 2024
The new Fidelity 401(k) plan is just one of their few products that focus on crypto.
Fidelity Investments, one of the largest 401(k) providers with 23,000 corporations under its belt, was reported to have launched a new plan that will see investors set aside a portion of their retirement savings in Bitcoin. Soon after the announcement, MicroStrategy Inc (NASDAQ: MSTR) has given its employees access to the service as disclosed in a tweet by Michael Saylor, the co-founder of the firm.
“MicroStrategy looks forward to working with Fidelity Digital Assets to become the first public company to offer their employees the option to invest in bitcoin as part of our 401(k) program,” he said.
MicroStrategy has in the past couple of years acquired Bitcoins aggressively regardless of the price volatility. It recently spent $200 million on Bitcoin to take its total holdings to nearly 130,000 BTC.
The new Fidelity 401(k) plan is just one of their few products that focus on crypto. According to the company, its decisions are usually influenced by the rising demands of digital assets. In a survey conducted by Fidelity, it was disclosed that 30% of institutional investors in the US prefer investment products that have cryptos like Bitcoin. In the research, it was estimated that 80 million investors in the US currently own or have invested in cryptos.
Dave Gray, Head of Workplace Retirement Offerings and Platforms at Fidelity Investments in a statement mentioned that the introduction of Bitcoin in the 401(k) plan is meant to match the evolving needs of investors.
“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,” he said.
Prior to the implementation, the US Labor Department expressed concerns about the involvement of cryptos in the 401(k) plans. According to them, the value of crypto is highly inflated and the prices are very volatile. They, therefore, urged Fidelity to provide educational resources to educate potential investors on the risk involved.
Sylvia Jablonski Kampaktsis, CEO, CIO, and co-founder at Defiance ETFs in a statement said that the move explains that digital assets are the most sought after for investment, and are around to stay.
“We now have countries, pensions, family offices, and now a massive institutional player in the retirement space allowing access. It speaks to the growth prospects of this asset class,” she said.
Brock Pierce, Bitcoin Foundation chairman, also disclosed that Fidelity had been working on this for some time and this development is the best way to get people comfortable in crypto adoption.