Bitcoin 401(k)s Are Coming

Earlier this week, Fidelity Investments announced they would be allowing their customers to allocate Bitcoin to their 401(k) retirement options later this year.

With over 23,000 employers who use Fidelity and 11.2 trillion dollars under management, this marks the first time a mainstream investment plan provider will offer Bitcoin to its clients.

Workers will be able to allocate 20% of their 401(k) into the digital asset. According to NPR, the fees will be as follows:

Fees will range "from 0.75% to 0.90% of assets. That means between $7.50 and $9 of each $1,000 invested in the bitcoin account would go toward paying expenses every year. That's less than some specialty investments but more than vanilla stock index funds, which can be virtually free."

The Bitcoin community's ethos regarding Bitcoin storage is "not your keys, not your coins." The best Bitcoin practice is when you are the only custodian of your Bitcoin's private keys, storing them on a hardware wallet or other self-custodied signing device(s). However, some folks admit they are not tech-savvy enough to practice Bitcoin self-custody and think that lack of expertise is a potential recipe for losing their Bitcoin. Mainstream offerings from Fidelity could fill that market gap. Offering choices will help the Bitcoin network, not hinder it.

I'm curious if Fidelity will allow the allocated Bitcoin to be moved to another custodial service after the purchase. My guess is likely not. Still, this is an excellent step towards mainstream Bitcoin adoption and giving more people the chance to access this savings technology.

This article, along with all content and opinions from BTC Examiner, is for educational purposes only and is not financial advice. Please reach out to your financial advisor before making any investment.