Bitcoin has gradually been finding its way into every part of society and its use as an investment vehicle has been the biggest part of it. There has been some pushback when it comes to using the cryptocurrencies in investment vehicles dominated by traditional finance but even this is starting to wane. Evidence of this is in the recent development from Fidelity Investments, which has announced that it would be allowing employees to invest in their 401k using Bitcoin.
Retire With Bitcoin
The 401k is one of the most popular investment vehicles aimed toward retirement for workers in the United States. These are usually dominated by stocks that appreciate over time while the account holder continues to pay into the account as they work. As time has gone on, account holders have begun to look towards other investment options to diversify their 401k investments and the latest stop is the pioneer cryptocurrency, Bitcoin.
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Fidelity Investments has announced that it would start allowing employees to add the cryptocurrency to their 401k accounts. This will make Fidelity the first major company to offer the option to add bitcoin to its retirement plan. The 401k is currently the country’s largest retirement-plan provider and hosts the majority of the market share. About 23,000 companies currently use Fidelity to administer their retirement plans and bitcoin will be available to employees of these companies.
BTC resting above $40,000 | Source: BTCUSD on TradingView.com
Fidelity announced that it will allow employees to put as much as 20% of their 401k plan in bitcoin. The plan is set to go into effect later in the year. The firm currently holds an estimated $2.4 trillion in 401k assets in 2020 alone, accounting for more than one-third of the total market share.
Fees are placed in the territory of 0.75% and 0.90%. This depends on the employer and the amount being paid into the account. There is also a trading fee but Fidelity is yet to disclose what this will be.
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There is a need for a diverse set of products and investment solutions for our investors. We fully expect that cryptocurrency is going to shape the way future generations think about investing for the near term and long term.” – Head of workplace retirement offerings and platforms at Fidelity.
This decision comes after a directive from the U.S. Labor Department which expressed concerns over adding cryptocurrency options to retirement plans. This was based on the fact that these digital assets remain largely speculative and very volatile.
Nevertheless, it seems that Fidelity’s offering is already starting to catch on as MicroStrategy is rumored to have already signed on to this plan.
Featured image from Investopedia, chart from TradingView.com
This post was originally published on www.newsbtc.com