Fidelity to allow Bitcoin investing for 401(k)

Employees will only gain access to the option if their employer signs off the option, which Fidelity says will start rolling out in mid-2022.

While Fidelity doesn’t specify how much employees can dedicate to cryptocurrency, it is speculated that employees can elect to save up to 20% of their retirement fund in Bitcoin. Fidelity plans on adding support for other cryptocurrencies at some point in the future.

As noted by Fidelity, business intelligence company MicroStrategy is the first to announce that it has adopted the Bitcoin retirement fund option. The company acquired USD 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 accounted for its Bitcoin assets in one of its SEC filings in 2021.

Fidelity may face some pushback on its new offering. In March 2022, the US Department of Labor warned fiduciaries against offering an option to save for retirement in cryptocurrency, citing that this type of investment presents significant risks and challenges to participants’ retirement accounts, including significant risks of fraud, theft, and loss.