Close Close
Bitcoin and investors

Portfolio > Alternative Investments > Cryptocurrencies

Fidelity to Offer Bitcoin in 401(k)s

Your article was successfully shared with the contacts you provided.

What You Need to Know

  • Fidelity’s new workplace Digital Assets Account for 401(k) plans will have Bitcoin as an investment option.
  • The 23,000 or so firms using Fidelity to administer their retirement plans will have the option to offer the accounts.
  • Fidelity says it will ensure

Starting later this year, the 23,000 or so firms that use Fidelity Investments to administer their retirement plans will have the option to offer Bitcoin through Fidelity’s core 401(k) plan lineup, the company said Tuesday.

That will make Fidelity the first major retirement plan provider to offer Bitcoin in 401(k)s.

Fidelity’s new workplace Digital Assets Account is a custom plan account that will hold Bitcoin and short-term money market investments to provide the liquidity needed for the account to facilitate daily transactions on behalf of investor, according to Fidelity.

“Bitcoin in the DAA will be held on the Fidelity Digital Assets custody platform to ensure institutional-grade security,” it said, adding that plan sponsors opting to offer the DAA will “establish employee contribution and exchange limits into the account.”

Employees will then “benefit from a fully integrated retirement plan, digital experience and education to help them make informed decisions,” it added.

DAA “will be available broadly to employers mid-year,” Fidelity said.

“We do not have a specific availability date that we can share at this time, but we will certainly follow up with additional specificity in the coming weeks,” a Fidelity spokesperson told ThinkAdvisor.

Early Adopters

MicroStrategy, a software company that has bought billions of dollars worth of Bitcoin, is the first company to announce it will offer the new plan accounts to employees, allowing them to have a portion of their retirement savings allocated to Bitcoin, according to Fidelity.

“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,” Michael Saylor, CEO and chairman of MicroStrategy, said in a statement included in the Fidelity news release.

It wasn’t immediately clear exactly when MicroStrategy planned to offer DAA as an option in their employees’ 401(k) plans or whether the company will be the first to actually do so.

“With the growing, mainstream interest in crypto investing, Fidelity has been conducting a number of conversations with prospective clients,” the Fidelity spokesperson said. “Those clients may announce that they will be leveraging the offering in the near term but we cannot speculate on the timeline for implementation.”

‘Significant Milestone’

Fidelity called the new offering a “significant milestone in advancing Fidelity’s position as a holistic digital assets service provider.”

Fidelity started exploring blockchain technology in 2014 with Bitcoin mining and in 2018, launched its first commercial offering, Fidelity Digital Assets, a platform that offers custody and trade execution for digital assets to institutional investors.

In 2020, Fidelity’s digital asset management business launched a private Bitcoin fund now available to accredited investors.

Earlier this month, Fidelity said it planned to launch the crypto-focused Fidelity Crypto Industry ETF that will track blockchain and digital payment processing companies.

“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,” according to Dave Gray, head of Workplace Retirement Offerings and Platforms at Fidelity Investments.

“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,” he said in a statement.

Citing data from the Fidelity Digital Assets 2021 Institutional Investor Digital Assets Study, the company noted that 30% of U.S. institutional investors surveyed would prefer to buy an investment product containing digital assets.

Fidelity estimated that about 80 million U.S. individual investors now own or have invested in digital currencies.


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.