Technology

Fidelity introduces Bitcoin investments for 401(k) plans

Fidelity will soon begin allowing eligible individuals to save a portion of their 401(k) in Bitcoin, The company announced this on Tuesday. Employees will only have access to the option if their employer signs off on the option, which Fidelity says is set to roll out in mid-2022.

While Fidelity does not specify how much employees can devote to cryptocurrency in its version, the Wall Street Journal reports that employees can choose to save up to 20 percent of their retirement savings in bitcoin. Dave Gray, Fidelity’s head of pension offerings and platforms, also said WSJ that Fidelity plans to add support for other cryptocurrencies at some point in the future.

“As a leading digital asset company, we are excited to be the first to offer employers Bitcoin for core 401(k)s, demonstrating our commitment to serving their evolving needs and our belief in the promise of blockchain technology reflects the future of the financial industry,” said Gray.

As noted by Fidelity, business intelligence firm MicroStrategy is the first company to announce that it has adopted the Bitcoin bond fund option. The company, run by Bitcoin proponent Michael Saylor, took over $250 million in bitcoin in 2020 and continued to buy into the cryptocurrency as part of its financial strategy. However, the Securities and Exchange Commission (SEC) objected to the way MicroStrategy has accounted for its Bitcoin assets in one of its SEC filings last year. Corresponding BloombergMicroStrategy used Non-GAAP Measuresor methods of reporting revenue that are not based on generally accepted accounting principles (GAAP) to account for its digital assets.

This wasn’t MicroStrategy’s first encounter with the SEC—in 2000 the SEC settled $11 million with Saylor and other executives over Allegations of civil accounting fraudand claimed that the company “materially overstated its revenues and earnings” after MicroStrategy’s IPO in June 1998 through March 2000. .”

Fidelity may face some resistance to its new offering. Last month, the The US Department of Labor warned Trustees opposed offering an option to save for retirement in cryptocurrency “to protect US workers’ retirement savings,” arguing that this type of investment “poses significant risks and challenges to participants’ retirement accounts, including significant risks of fraud, theft and loss.” President Joe Biden has also signed an executive order designed to push for more crypto regulation in the US.

https://www.theverge.com/2022/4/26/23043424/fidelity-rolling-out-bitcoin-investing-401-k-plans-cryptocurrency-microstrategy Fidelity introduces Bitcoin investments for 401(k) plans

Fry Electronics Team

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