Fidelity’s bitcoin 401K plan, the first in the industry gains more attraction from fintech companies

Cryptocurrencies in 401K Plan.

Basically, a 401K plan is a retirement savings plan offered by many American employers that has tax advantages for the saver. It is named after a section of the U.S. Internal Revenue Code. When a worker enrolls in a 401(k), they consent to have a portion of each paychecks put directly into an investing account. A portion or the entire investment may be matched by the employer. The employee has a variety of investing alternatives, most often mutual funds.

In the recent times, the employers are also encouraging to give extra options for the employees to invest into cryptocurrency via 401k plan. Fidelity investments is one of the pioneers to offer first ever bitcoin related 401K plan and has pushed cryptocurrency into investment management sector. As Fidelity has stepped up in the game, offering employers an option for bitcoin investments, many fintech companies have also followed the path and have come with their own plans to offer to the employees.

According to reports, Bitcoin IRA has started allowing the customers to roll over 401K plan, allowing them to trade and invest in cryptocurrencies such as bitcoin. ForUSAll is another company that has started offering cryptocurrency in the 401k Plans. Swan Bitcoin will also allow the customers to use their retirement accounts to buy bitcoins.

Fidelity’s steps in the direction of cryptocurrencies.

Credits: Forbes

Fidelity Investment went on to announce in April that, the company will be allowing the 401k plan employees an opportunity to invest in bitcoins through digital assets accounts. The news was celebrated around the cryptocurrency market, as Fidelity was one of the first companies to push digital assets into retirement accounts allowing older people also a chance to enter into the crypto market.

It was also reported that, the employers who are intending to join the new group of 401k plan from the Fidelity group have to do due diligence and obtain necessary approvals before they can offer the plan. The process is predicted to take several months, according to a spokesperson from Fidelity.

Among Fidelity’s clients, MicroStrategy was the first firm to sign up with the new 401k plans. According to Fidelity’s beliefs it is reported that more and more companies are intending to join the company. According to Fidelity, the first employers to include a Bitcoin option in their 401(k) plans will do so in the fall.

Writer’s Analysis:

The move taken by fidelity investment is rather a courageous one, considering the lack of technological information in regards to cryptocurrencies in the older generation of people. But the decision will surely help cryptocurrency market to blossom in the long run and provide the industry a good chance to revolutionize the financial sector.

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