U.S.-based Fidelity will invest bitcoin (BTC) in participants' 401(k) retirement plans if employers include the option in their plans, reports say. shauryamalwa reports.
Employers could place a ceiling on the amount of savings earmarked for bitcoin, with the maximum cap expected to be no more than 20%. However, the move would allow several first-time investors to gain exposure to bitcoin without having to make a separate account on a crypto exchange.
401 accounts are company-sponsored retirement accounts in the U.S. to which employees can contribute income, while employers may match contributions. Employees get a tax break on the money they contribute, while contributions are automatically withdrawn from employee paychecks and invested in the funds of their choosing.in 401 assets in 2020, or more than a third of the market at the time, as per research firm Cerulli Associates.
Fees on the bitcoin investments in Fidelity’s 401 accounts would range between 0.75% and 0.90% – depending on the amount and employer – and held on its own custody platform. An additional trading fee would be levied, which remains undisclosed at writing time. Fidelity further plans to create educational materials for investors.
Business analytics firm MicroStrategy is said to have already signed on to the plan. The firm holds billions of dollars in bitcoin and its founder is a staunch backer – oftenThe move is the latest in line of several bitcoin-centric products and offerings by Fidelity, which was one of the first major firms to warm up the then rising asset class in 2018.
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