Fidelity to Offer Bitcoin in 401(k)s

What You Need to Know

Fidelity’s new workplace Digital Assets Account for 401(k) plans will have Bitcoin as an investment option.
The 23,000 or so firms using Fidelity to administer their retirement plans will have the option to offer the accounts.
Fidelity says it will ensure

Starting later this year, the 23,000 or so firms that use Fidelity Investments to administer their retirement plans will have the option to offer Bitcoin through Fidelity’s core 401(k) plan lineup, the company said Tuesday.

That will make Fidelity the first major retirement plan provider to offer Bitcoin in 401(k)s.

Fidelity’s new workplace Digital Assets Account is a custom plan account that will hold Bitcoin and short-term money market investments to provide the liquidity needed for the account to facilitate daily transactions on behalf of investor, according to Fidelity.

“Bitcoin in the DAA will be held on the Fidelity Digital Assets custody platform to ensure institutional-grade security,” it said, adding that plan sponsors opting to offer the DAA will “establish employee contribution and exchange limits into the account.”

Employees will then “benefit from a fully integrated retirement plan, digital experience and education to help them make informed decisions,” it added.

DAA “will be available broadly to employers mid-year,” Fidelity said.

“We do not have a specific availability date that we can share at this time, but we will certainly follow up with additional specificity in the coming weeks,” a Fidelity spokesperson told ThinkAdvisor.

Early Adopters

MicroStrategy, a software company that has bought billions of dollars worth of Bitcoin, is the first company to announce it will offer the new plan accounts to employees, allowing them to have a portion of their retirement savings allocated to Bitcoin, according to Fidelity.

“Teaming with companies like Fidelity that are innovating in bitcoin for corporations is important to us, as is furthering the development of the bitcoin ecosystem for institutional investors,” Michael Saylor, CEO and chairman of MicroStrategy, said in a statement included in the Fidelity news release.

It wasn’t immediately clear exactly when MicroStrategy planned to offer DAA as an option in their employees’ 401(k) plans or whether the company will be the first to actually do so.