Fidelity Delves Deeper Into Crypto by Allowing Bitcoin in 401(k)s

The roughly 23,000 employers using the platform will gain the ability to allocate up to 20% to the cryptoasset by mid-year


Source: Shutterstock


key takeaways

  • “Fidelity’s engine of distribution will swell demand,” SkyBridge Founder Anthony Scaramucci said
  • US Department of Labor said last month that 401(k) plan fiduciaries must exercise “extreme care” before investing in crypto

Fidelity is set to allow individuals to allocate a portion of their retirement savings to bitcoin through the company’s 401(k) plan investment lineup, which some industry watchers view as a key milestone for the growing industry.

The Boston-based financial services provider’s workplace Digital Assets Account (DAA) offering is expected to be available to the roughly 23,000 employers using Fidelity’s platform by mid-year.

Dave Gray, the company’s head of workplace retirement offerings and platforms called the DAA a “first-of-its-kind” tool.

“This new offering represents the firm’s continued commitment to evolving and broadening its digital assets offerings amidst steadily growing demand for digital assets across investor segments,” Gray said in a statement. 

Fidelity has seen growing interest from employers in providing their employees access to digital assets in defined contribution plans, a Fidelity spokesperson told Blockworks.

The DAA is a custom plan account that holds bitcoin and short-term money market investments to provide enough liquidity for daily transactions on behalf of the investor, the representative added.

It enables employees to gain exposure to bitcoin by purchasing units of an account as part of their investment strategy, versus a direct purchase of bitcoin. Bitcoin in the DAA will be held on Fidelity Digital Assets’ custody platform, and the maximum allowable allocation will be 20%.

MicroStrategy CEO Michael Saylor revealed on Twitter that his company plans to work with Fidelity to offer its employees the option to invest in bitcoin through their 401(k) portfolios.

Fidelity’s latest decision “cannot be underestimated,” SkyBridge Founder Anthony Scaramucci said in a Twitter post.

“⁦Fidelity⁩ is about to do for bitcoin what it did for stocks starting in the 1980s,” the crypto executive tweeted. “⁦Bitcoin is a fixed supply and Fidelity’s engine of distribution will swell demand.”

The announcement comes about a month after the US Department of Labor published compliance assistance for 401(k) plan fiduciaries considering investments in crypto.

“At this stage of cryptocurrency’s development, fiduciaries must exercise extreme care before including direct investment options in cryptocurrency,” Employee Benefits Security Administration Acting Assistant Secretary Ali Khawar said in a statement at the time.

Fidelity’s new offering is the latest in a string of moves that have further entrenched the business in the crypto space.

The company began bitcoin mining in 2014 and launched Fidelity Digital Assets — a platform offering crypto custody and trade execution to institutional investors — in 2018. Fidelity launched a private bitcoin fund for accredited investors in 2020 and more recently unveiled a metaverse experience and two crypto-related ETFs.

Fidelity estimates that roughly 80 million US individual investors currently own or have invested in digital currencies. According to the Fidelity Digital Assets 2021 Institutional Investor Digital Assets Study, 30% of surveyed institutional investors in the US would prefer to buy an investment product containing digital assets. 

Christine Sandler, Fidelity Digital Assets’ head of sales and marketing, said during a February webinar that the company has seen increased digital asset adoption from family offices, registered investment advisers (RIAs) and corporations. She noted at the time that “there’s still a fairly long tail of folks that are just beginning to get started in this space.”

“Increasingly, we are seeing interest from leading employers to add digital assets to their 401(k) plan,” Chris Call, executive vice president of retirement services at consulting firm Newfront, said in a statement. “As companies consider alternative investment options in their plan design, we believe digital assets are worthy of consideration.”

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.


Upcoming Events

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Screenshot 2024-05-23 091855.png


Bitcoin L2s aim to boost scalability while preserving decentralization and security, unlocking a better user experience, and new avenues for Bitcoin-powered innovations. However, no existing Bitcoin L2 leverages the full security of Bitcoin.


Also, a Solana memecoin creator was recently hospitalized with third-degree burns after pulling a stunt intended to pump his token



Chain abstraction will drive significant innovations, shaping the future of dapps while addressing many current challenges facing the Web3 ecosystem


Right now, crypto platforms and custody services live in the shadow of a legacy of security failures — and it shouldn’t be that way


The current crop of ETF issuers could’ve only made it this far by promising not to stake any ETH they hoover up


After accelerating conversations with issuers, the SEC took a step toward allowing ETH funds to launch


As FIT21 advances to the Senate, experts are cautiously optimistic but say to expect some changes to the bill