Key facts:
Fidelity will allow savers to invest in BTC or its derivatives for their retirement
Users have USD 2.4 billion invested in their retirement plans, according to a study
Fidelity, the largest provider of retirement plans in the United States, announced hours ago that it would allow its clients to put a part of their retirement money in bitcoin (BTC). Of course, it is only in case their employers are willing to allow it, according to The New York Times.
The initiative could bring millions of people closer to investment in Bitcoin as a way to save for your retirement. An option that is attractive in view of the galloping inflation that the United States is going through. The company is estimated to have around $2.4 trillion in retirement plans offered by more than 23,000 companies. This according to a report by the research firm Cerulli Associates shared by the middle.
Dave Gray, Fidelity’s head of retirement offerings and platforms, stated, “We’re starting to hear a growing interest … as to how Bitcoin or digital assets can be offered in a retirement plan.”
Unsurprisingly, MicroStrategy, Michael Saylor’s software services firm that owns his bitcoin reserves, You have already enrolled in the retirement program proposed by Fidelity. This was confirmed by Gray, who also revealed that he is in conversation with other employers interested in joining.
Fidelity announced that the digital asset account for retirees will be widely available in mid-2022, as part of its investment menu called “401(k)”. This will include bitcoin, as well as cryptocurrency-derived investment funds, known by their acronym “ETFs.”
Precisely, may allocate a maximum of 20% of their retirement plan to Bitcoin. Although it can be a lower percentage, if the employer so decides. The company assured that it will share educational material so that users understand how these financial assets work that allow them to diversify their savings portfolios.
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Regulators warn of risks of investing in Bitcoin
Fidelity’s initiative comes a month after the United States Department of Labor issued an assistance document for the compliance with the use of cryptocurrencies in retirement plans. In this, he reminded the supervisors of the plans that they must act only in the best interest of the workers, so that their financial security must be a priority.
Although the agency did not prohibit retirement plans from integrating cryptocurrencies, it indicated that these options do not seem “wise.” This is due to the risks of losing money generated by its price volatility, as well as the challenges involved in not falling into fraud and theft networks.
The agency said that investors could misunderstand the risks of cryptocurrencies.. Likewise, he expressed concern about the valuation procedures, custody and maintenance of the records of all transactions with cryptographic assets.
Investment specialists like Andrew Lill advocate using bitcoin as a retirement savings strategy. Beyond the fact that money can be lost if its value falls, it also allows funds to be multiplied if it rises, which is beneficial for investors, he indicated as reported in CriptoNoticias.
Despite hesitations from regulators, companies are still moving to integrate bitcoin into their services due to soaring investor demand. Likewise, with the government agency, it announced that it would carry out a research program on the plans that offered cryptocurrencies and related investments.