Fidelity Investments announced on Tuesday that individuals will be able to invest a portion of their retirement savings in Bitcoin. It will be possible through their 401(k) investment plans. They are the first large retirement plan provider to do offer this.

The announcement might bring millions of users closer to making direct investments in Bitcoin this summer. They would not have to open an account on a cryptocurrency exchange. However, regulators have already expressed skepticism about the idea. The Department of Labor, which regulates workplace retirement plans, announced this month that it would review plans that added digital assets to their investing options.

An increasing number of traditional investing options that offer exposure to cryptocurrency have recently entered the market. This includes several exchange-traded funds in the last year. But Fidelity’s decision is more notable since it would allow Americans to bet on the emerging and unpredictable sector using their retirement funds.

Dave Gray is head of Fidelity Investments’ workplace retirement offerings and platforms. He said: “Plan sponsors are increasingly interested in vehicles that allow them to provide their employees access to digital assets. Also, individuals want to add crypto into their investment strategies”.

According to research company Cerulli Associates, Fidelity will introduce a digital assets account to hold Bitcoin. Fidelity already handles $2.4 trillion in 401(k) assets in 2020, accounting for more than a third of the market. And they say the account fee will range from 0.75 percent to 0.90 percent of assets, depending on the employer and the amount invested. An additional trading tax, which has yet to be determined, would be “competitively priced,” according to the company.

MicroStrategy, a cloud and intelligence provider, will be the first company to include bitcoin in its retirement plan. And this is no surprise as Microstrategy already has Bitcoin on its balance sheet.

About Fidelity Investments

Fidelity Investments began as a mutual fund company in 1946 and is now a privately owned investment management firm. Fidelity today provides a variety of services, including:

  • fund distribution and investment advice
  • wealth management
  • life insurance
  • retirement services
  • securities execution and clearance.

Fidelity’s interest in cryptocurrencies dates back over a decade. Abigail Johnson, the company’s current chairman and CEO, began holding weekly internal meetings to explore digital assets and blockchain technology. In 2015, the company began mining bitcoin. Later, it included a connection to Coinbase, the cryptocurrency exchange, to retail clients’ accounts to track their holdings. It launched its own cryptocurrency fund for high-net-worth individuals in 2020.

Fidelity’s action comes at a time when interest in digital currencies is at an all-time high. According to Fidelity, roughly 80 million individual investors in the United States hold or have invested in digital currencies. Major institutional investors have invested in cryptocurrencies or funds that buy them or taken shares in firms in the fast-growing industry.

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