Crypto Coming to Your 401(k)

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Fidelity Investments announced that people will soon be able to add a little bitcoin to their retirement accounts. As much as 20%.

Later this year, the 23,000 U.S. employers who use Fidelity can choose to offer a bitcoin option to their employees. Will they do it? Maybe.

Why Employers Might

This is a big win for crypto, with a huge endorsement from an investment giant, the first in the retirement-plan provider space to make the leap. And it might be the right time for crypto to catch on. “There is a need for a diverse set of products and investment solutions for our investors,” said Dave Gray, head of workplace retirement offerings and platforms at Fidelity. “We fully expect that cryptocurrency is going to shape the way future generations think about investing for the near term and long term.”

While Fidelity is starting with bitcoin, other options are expected to be available in the future. This is good news for individual investors in the country, who are all about the crypto: 80 million U.S. individual investors own or have invested in digital currencies, according to Fidelity estimates.

Why They Might Not

The U.S. Department of Labor regulates employer-sponsored retirement accounts, so they’re the parents in this situation. In March, they sat employers down for a talk with guidance that warned them to “exercise extreme care before they consider adding a cryptocurrency option to a 401(k) plan’s investment menu.”

With this guidance and elsewhere, DOL officials have expressed “serious concerns,” which means the legal hurdles could be big.

Most retirement funds involve at least a little risk. Crypto is a new risk, so people are hesitant, but this move from Fidelity makes me think it’s only a matter of time before crypto is just another part of any old 401(k).

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