PROVIDENCE – Fidelity Investments Inc. will soon offer bitcoin as an investment option on its workplace 401(k) plans, the company announced on April 26.
The new Digital Assets Account makes Fidelity the first major 401(k) provider to put cryptocurrency on the menu, building upon the 2018 launch of a digital asset platform, and in 2020, its own private bitcoin fund, the company stated.
“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,” Dave Gray, Fidelity’s head of workplace retirement offerings and platforms, said in a statement. “There is growing interest from plan sponsors for vehicles that enable them to provide their employees access to digital assets in defined contribution plans, and in turn from individuals with an appetite to incorporate cryptocurrencies into their long-term investment strategies.”
Under the program, employees of participating companies can invest part of their 401(k) into a digital assets account where their bitcoin is held and can also take distributions from that account. Employers can set their own limits for how much of a 401(k) plan workers can invest into bitcoin, with a maximum of 20%, based on terms set by Fidelity.
Microstrategy, a business intelligence solutions provider, will be the first company to sign on to the new offering, with the option to become “broadly available” to employees by the middle of the year, Fidelity stated. How many other companies with investment plans with Fidelity plan to take advantage of the offering is unclear, although a 2021 Fidelity study suggests 30% of institutional investors said they are interested in investing in digital assets.
“Increasingly, we are seeing interest from leading employers to add digital assets to their 401(k) plan,” Chris Call, executive vice president for retirement services for consulting firm Newfront, said in a statement. “As companies consider alternative investment options in their plan design, we believe digital assets are worthy of consideration.”
Employers with Fidelity plans can expect to receive more details in the coming months as Fidelity builds out its blockchain technology and digital assets platform, according to a news release.
Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.
