Fidelity Investments to offer Bitcoin options in 401(k) accounts

Fidelity Investments will allow investors to add Bitcoin to their 401(k) retirement savings and investment plans and that 23,000 companies that use the financial services corporation to administer their retirement plans will have the option to add the cryptocurrency later this year.

The company said the move would make Fidelity the first major retirement plan provider to offer such an option and would allow investors to allocate as much as 20% of their nest eggs to bitcoin. However, that threshold could be reduced by plan sponsors.

"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, 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."

Business intelligence solutions provider MicroStrategy2 plans to be the first employer to offer DAA in their retirement plan.

"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, Chairman and CEO of MicroStrategy. "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."

Fidelity says the new proprietary offering will enable employees who are comfortable with the risks and volatility of cryptocurrency to invest in bitcoin through a Digital Assets Account within the core lineup of their 401(k) plan.

The DAA is a custom plan account that holds bitcoin and short-term money market investments to provide the liquidity needed for the account to facilitate daily transactions on behalf of the investor. Bitcoin in the DAA will be held on the Fidelity Digital Assets custody platform to ensure institutional-grade security.

Plan sponsors electing to offer the DAA establish employee contribution and exchange limits into the account. Employees will benefit from a fully integrated retirement plan, digital experience and education to help them make informed decisions.