Fidelity Investments launched what it deems the industry’s first offering that will enable investors to have a portion of their retirement savings allocated to bitcoin through the core 401(k) plan investment lineup.

                By                    Yaёl Bizouati-Kennedy

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The move was prompted by the growing interest in digital assets, and the fact that 401(k) plan sponsors and participants are looking for ways to gain digital assets exposure in retirement portfolios, according to a Fidelity press release.

The new offering, which bitcoin-bull firm MicroStrategy plans to add to its 401(k) plan later this year, will be available broadly to employers mid-year.

“Fidelity is thrilled to launch a first-of-its-kind workplace digital assets account that will enable individuals to have a portion of their retirement savings allocated to bitcoin through the core 401(k) plan lineup. This new offering represents the firm’s continued commitment to evolving and broadening its digital assets offerings amidst steadily growing demand for digital assets across investor segments.”

Fidelity will allow clients to allocate as much as 20% to bitcoin, with the addition of other digital assets in the future, according to a spokesperson.  

“It is no surprise that they are rolling this out, as it is no secret that they have been working on this behind the scenes for a number of years. It will be yet another way for users to get comfortable adopting bitcoin,” Pierce added. 

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“The move by Fidelity, also enforces the idea that digital assets are highly sought out investments which are here 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 added.

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

Meanwhile, Fidelity estimates that roughly 80 million U.S. individual investors currently own or have invested in digital currencies.

Michael Saylor, chairman and CEO of MicroStrategy, wrote in the release, “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.”

“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,” he added.

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“In recent months, some financial services firms have begun marketing investments in cryptocurrencies as potential investment options for participants in 401(k)s. At this early stage in the history of cryptocurrencies, however, the U.S. Department of Labor has serious concerns about plans’ decisions to expose participants to direct investments in cryptocurrencies or related products, such as NFTs, coins, and crypto assets,” the Department said in a blog post on its website in March.