U.S. financial services firm Fidelity Investments says it will allow clients to hold Bitcoin (BTC) in their 401(k) retirement savings accounts.
The decision by Fidelity will allow investors to gain exposure to Bitcoin without having to open a separate account on a cryptocurrency exchange.
In the U.S., 401(k) accounts are company-sponsored retirement accounts to which employees can contribute income, while employers may make matching contributions.
Employees get a tax break on the money they contribute to a 401(k) account, while contributions are automatically withdrawn from employee paychecks and invested in the funds of their choosing.
Fidelity’s retirement accounts held an estimated $2.4 trillion U.S. in assets in 2020, or more than a third of the market at the time, according to research firm Cerulli Associates.
Fees on the Bitcoin investments in Fidelity’s 401(k) accounts will range between 0.75% and 0.90% – depending on the amount and employer – and held on its own custody platform.
The move is the latest of several Bitcoin offerings by Fidelity. Last November, Fidelity launched Canada’s first Bitcoin custody and trading services for institutional investors.
Fidelity then launched two publicly traded Bitcoin funds in December on the Toronto Stock Exchange (TSX). Earlier this year, Fidelity launched similar products in Switzerland and Germany.
