Bitcoin coming to 401(k) plans through Fidelity digital asset accounts

Roughly 80 million individual investors in the United States currently own or have invested in digital currencies, according to Fidelity

Fidelity Investments is launching a new offering for 401(k) plans that will allow customers to invest a portion of their retirement savings in bitcoin.

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The Fidelity Digital Assets Account (DAA) will hold bitcoin and short-term money market investments to provide the liquidity needed for the account to facilitate daily transactions on behalf of the investor. Bitcoin in the DAA will be held on the Fidelity Digital Assets custody platform to ensure institutional-grade security and plan sponsors electing to offer the DAA will establish the employee contribution and exchange limits into the account.

Fidelity Investments is launching a new offering for 401(k) plans that will allow customers to allocate a portion of their retirement savings to investing in Bitcoin. (iStock)

"As a leader in digital assets, we are thrilled to be the first to offer employers exposure to bitcoin for the core lineup of 401(k)s that reflects our commitment to meeting their evolving needs and our belief in the promise of blockchain technology for the financial industry’s future," Dave Gray, Fidelity's head of workplace retirement offerings and platforms, said in a statement. "There is growing interest from plan sponsors for vehicles that enable them to provide their employees access to digital assets in defined contribution plans, and in turn from individuals with an appetite to incorporate cryptocurrencies into their long-term investment strategies."

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Business intelligence solutions provider MicroStrategy plans to be the first employer to offer a digital assets account in their retirement plan later this year. Digital asset accounts will be available more broadly to employers mid-year. 

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As of March 31, Fidelity has $11.3 trillion in assets under administration, including discretionary assets of $4.2 trillion.

The firm first began exploring blockchain technology in 2014 with bitcoin mining. It went on to launch its digital asset custody and trading platform in 2018 and a private bitcoin fund in 2020.

A recent Fidelity survey of institutional investors in the U.S. found that 30% of respondents would prefer to buy an investment product containing digital assets. Fidelity estimates that roughly 80 million individual investors in the U.S. currently own or have invested in digital currencies.