Recently, Fidelity announced that they will soon be incorporating access to Bitcoin into their 401(k) plans. As the first 401(k) provider to add access to cryptocurrency, we’re excited to see that Fidelity has joined our mission to help level the playing field, and anticipate that other large institutions will be joining in as well.
Growing Demand
Studies now show that there are 36.5 million cryptocurrency users in the United States, including 60% of millennial investors. Fidelity offers a similar perspective to ours on why it’s time to bring access to this growing asset class to 401(k) accounts. Their announcement states, “there is growing interest from plan sponsors for vehicles that enable them to provide their employees access to digital assets in defined contribution plans, and in turn from individuals with an appetite to incorporate cryptocurrencies into their long-term investment strategies.”
Cryptocurrency is here to stay, and it’s making waves in the financial sector that can’t be ignored.
As many as one in four Millennials now report that they plan to use cryptocurrency to help fund their retirement, and among our own customers, we’ve found that 60% of sponsors are very interested in adding a cryptocurrency option for their employees. Cryptocurrency is here to stay, and it’s making waves in the financial sector that can’t be ignored.
We welcome Fidelity to the table
Fidelity’s recent announcement that they are providing access to a tokenized form of Bitcoin in their upcoming 401(k) plans affirms our decision, and indicates a growing demand for access to digital assets in retirement portfolios, and growing acceptance that cryptocurrencies have a role to play in a well diversified portfolio for some participants. We’re excited to be on the cutting edge of that future, and glad that others are joining us.
As more providers begin to incorporate cryptocurrency into their plan designs, the 401(k) industry will see major changes. In particular, because the solutions offered by ForUsAll and Fidelity are very different, this allows plan sponsors multiple avenues to provide their employees with access to cryptocurrency in their 401(k)s.
The solutions offered by ForUsAll and Fidelity are very different, and this allows plan sponsors multiple avenues to provide their employees with access to cryptocurrency in their 401(k)s.
Given the volatility of cryptocurrency, we expect that other providers who choose to add cryptocurrency access to their plans will incorporate sensible guardrails and clear guidance for participants. Cryptocurrencies are made available through a self-directed window, which sponsors must choose to activate, and not as part of the core investment line. At ForUsAll, we select the cryptocurrencies that are available through a digital asset screening process. This is designed to exclude cryptocurrencies that exhibit high risks of fraud, have no known use-cases, or that have a high likelihood of being deemed unregistered securities, as generally understood today. Before they can access the self-directed cryptocurrency window, participants must first demonstrate their understanding of crypto investments by taking and passing a quiz. This quiz covers information about risk, liability, and fees. Once participants do have access, their crypto allocations are capped at 5% to reduce sponsor liability and participant risk.
More tools, and more choice
Though we are, of course, committed to the success of our own business, we decided to offer cryptocurrency access not just because it is a differentiator, but because we believe it has the power to help working people transform their ability to save for retirement. We’re invigorated by a growing 401(k) industry that empowers all Americans with access to more tools, and more choice.
