Fidelity pioneers allowing retirement accounts to hold bitcoin Will rivals follow?

Fidelity will allow investors to deposit bitcoin in their 401(k) retirement accounts, and later this year 23,000 companies that use Fidelity to manage their retirement plans will have the option to put bitcoin in retirement savings Account, which will allow employees to access bitcoin, with a maximum allocation of 20%. After Fidelity pioneered this, will its competitors follow?


Competitors are weighing

Vanguard, one of the largest fund managers in the U.S. alongside Fidelity, is still weighing, and a company spokesperson told Blockworks that Vanguard has no plans to offer a cryptocurrency option in a 401(k) plan.

Vanguard, which has about 1,400 401(k) plan sponsors, cited a September blog post by the company that called cryptocurrencies “highly speculative” and noted that their long-term investment case was “weak.”

The blog post reads: “As many of our investors know, our investment philosophy encourages staying the course and cutting out the noise, and as cryptocurrencies and blockchain become more mainstream, we will continue to monitor their development and Find the best way forward for our investors.”

Another Canadian asset manager, Charles Schwab, has also been tight-lipped about its plans.

Schwab currently serves approximately 1,000 401(k) plans. About 60% of Schwab retirement plan service clients offer a “brokerage window” in their 401(k) plans, allowing individuals to access stocks, mutual funds, ETFs and over-the-counter trust products.

While some of these investment options provide exposure to cryptocurrencies, assets in such products represented less than 1% of Schwab’s total 401(k) brokerage assets as of Dec. 31, a company spokesperson told Blockworks.

T. Rowe Price, who serves some 6,900 401(k) plans, has pointed out that the crypto space is “highly speculative and lacks regulatory transparency,” with a spokesperson commenting: “None of the defined contribution plans we record offer cryptocurrencies, We haven’t seen customer demand for this kind of investment.”

Just a matter of time?

Bobby Zagotta, CEO of Bitstamp USA, said Fidelity wouldn’t make the move if the market really wasn’t in demand for cryptocurrencies.

Bitstamp’s latest Crypto Pulse survey found that 80% of institutional investors believe cryptocurrencies will overtake traditional investment vehicles within a decade.

“Other financial institutions will have to follow Fidelity’s lead or risk losing customers who increasingly see digital assets as an important part of their retirement plans,” Zagotta said .

Nina Tannenbaum, head of business operations at Algorand, said Fidelity’s move is a key indicator that digital currencies are increasingly seen as more than just short-term speculative assets.

“It’s encouraging to see Fidelity’s plans and they could consider expanding their offerings to include much more ESG and sustainability-friendly digital assets,” Tannenbaum said .

While Fidelity was the first major financial services firm to offer crypto exposure within 401(k)s, ForUsAll, an investment platform that offers low-cost 401(k) retirement plans for small and mid-sized businesses, launched a products that allow employers to offer alternative investment options in such plans.

ForUsAll CEO Jeff Schulte said support for encrypted access in 401(k)s is “inevitable” and he hopes other large institutions will follow suit.

Jeff Schulte commented: “Not all financial institutions and banks will jump on board immediately; it will take time, but we believe that those who truly listen to their customers and understand the role of crypto in a diversified portfolio – they will be innovators and Follow up on Fidelity’s groundbreaking initiative”.

Posted by:CoinYuppie,Reprinted with attribution to:
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