Bulletins

Fidelity wants to help you retire on bitcoin. The government has concerns.

The retirement asset manager is adding crypto capabilities to its 401(k) plans, despite recent warnings by the Department of Labor about cryptocurrencies' risks for savers.

Bitcoin

Can bitcoin be a retirement asset?

Image: Protocol

Want to spice up your 401(k)? Fidelity is going crypto. The major financial services provider launched Digital Asset Accounts on Tuesday, allowing account holders to have a portion of their retirement savings allocated to bitcoin. It's starting by offering the accounts to employees of MicroStrategy, a software company that has placed bets on cryptocurrency.


Though Fidelity isn't the first firm to offer crypto retirement accounts, the company appears to be the biggest to wade in. Besides MicroStrategy, the option will be broadly available for employers to add to its 401(k) plans by the middle of this year, Fidelity said in its announcement. Prior to this, Fidelity had only offered cryptocurrency accounts to institutional and accredited investors. Currently, the plans will only invest in bitcoin, not other cryptocurrencies. MicroStrategy CEO Michael Saylor is an outspoken bitcoin advocate.

“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," Dave Gray, Fidelity's head of workplace retirement offerings and platforms, said in a statement.

The move to offer crypto-enabled 401(k) plans is the first of its kind by a major firm. Fidelity is taking on a big regulatory risk along with its pioneering status.

The Department of Labor released guidance in March on putting cryptocurrencies in retirement accounts, strongly advising caution. The department warned companies considering this option of cryptocurrencies' "extreme price volatility" and "significant risks of fraud, theft, and loss." Some of the department's other concerns include lack of investment knowledge from plan participants, record-keeping concerns, and the accuracy of the valuation of cryptocurrency. The Department of Labor oversees workplace retirement plans under the Employee Retirement Income Security Act of 1974, which puts it alongside a host of federal agencies looking to stake a claim to crypto oversight.

"The Department cautions plan fiduciaries to exercise extreme care before they consider adding a cryptocurrency option to a 401(k) plan's investment menu for plan participants," the agency wrote. It warned that it soon planned to investigate firms that offered cryptocurrencies.

Fidelity has other exposure to crypto through an institutional custody business, Fidelity Digital Assets. It began experimenting with cryptocurrencies in 2014 and started testing products with its own employees in 2016.

As Fidelity plunges into the digital asset world, other major firms seem more hesitant. Sébastien Page of T. Rowe Price said in August that the mandates it manages for its clients "do not currently appear well suited for investing in cryptocurrencies, especially given the extraordinary level of speculation and volatility in many crypto markets," though the firm will continue to research it. Vanguard said it also doesn't offer cryptocurrencies as an investment option, but acknowledges the "impact they’re making in the investing world."

"As cryptocurrencies and blockchain become increasingly mainstream, we’ll continue to monitor their development and discern the best path forward for our investors," Vanguard wrote in a piece of advice for investors in September.

Latest Bulletins

Mobile game revenue will decline for the first time in history this year, market research firm Newzoo now says in a revised outlook for the 2022 global games market. While the whole game industry is expected to contract by 4.3% — another first since Newzoo began tracking the market in 2007 — the company is predicting a 6.4% decline in mobile game spending on top of a 4.2% decline in console game spending.

Keep Reading Show less

Amazon is planning to lay off thousands of employees, Protocol has learned, ahead of what the company has cautioned will be a slow holiday shopping season.

Keep Reading Show less

Google agreed to pay $391.5 million and make changes to its user privacy controls as part of a settlement with a coalition of 40 state attorneys general. The coalition accused Google of misleading customers about location-tracking practices that informed ad targeting.

Keep Reading Show less

FTX has filed for bankruptcy and the crypto company also announced that founder Sam Bankman-Fried has resigned as CEO.

Keep Reading Show less

Salesforce recently updated its internal policies to make it easier for managers to terminate employees for performance issues without HR involvement, Protocol has learned, a move that comes as the software giant looks to shed as many as 2,500 jobs.

Keep Reading Show less

The Consumer Financial Protection Bureau said fraud and scam reports comprise the top complaint it receives about virtual currencies — and that customers are finding little help from companies when it happens.

Keep Reading Show less

Elon Musk sent his first email to Twitter staff late Wednesday, warning of a difficult economic road ahead and telling employees they need to be in office for a minimum of 40 hours per week. "Sorry that this is my first email to the whole company, but there is no way to sugarcoat the message," he began, ominously.

Keep Reading Show less

Binance isn’t buying FTX after all. The crypto giant said Wednesday it has decided that it “will not pursue the potential acquisition” based on a “corporate due diligence” review.

Keep Reading Show less

On Wednesday, John Kerry unveiled a plan for a new carbon credit program aimed at mobilizing private capital to help middle-income countries transition away from coal and move toward renewable energy.

Keep Reading Show less

Meta announced it was laying off more than 11,000 employees Wednesday morning, slashing jobs in its recruiting department and refocusing its remaining team on AI discovery, ads, and its investment in the metaverse.

"I want to take accountability for these decisions and for how we got here," Mark Zuckerberg wrote in a message to employees that was also posted online. "I know this is tough for everyone, and I’m especially sorry to those impacted."

Keep Reading Show less

Al Gore has one mission this week at COP27, and that’s to give climate negotiators what he hopes will be a critical tool to address the crisis at hand: an independent, global inventory of greenhouse gas emissions, down to the individual facility.

The Climate TRACE coalition just released the world’s most detailed inventory of global greenhouse gas emissions, which Gore, a founding member, is unveiling on Wednesday at the United Nations climate summit in Egypt.

Keep Reading Show less

Way back in March, your friendly Protocol Climate team offered you some tips for writing a climate plan that doesn’t suck. Surely you took that advice. But if for some reason you didn’t, the United Nations has your back.

Keep Reading Show less

Binance CEO Changpeng “CZ” Zhao said Tuesday the crypto powerhouse signed a deal to acquire rival FTX.

Keep Reading Show less

Salesforce is preparing for a major round of layoffs that could affect as many as 2,500 workers across the software vendor, Protocol has learned, in a bid to cut costs amid a new activist investor challenge and harsh economic conditions.

Keep Reading Show less

BlockFi has introduced a new digital assets interest product for accredited investors, after previously agreeing to shut down a yield-paying crypto product that the SEC said was illegal.

Keep Reading Show less

The Justice Department said Monday it seized $3.4 billion worth of bitcoin stolen in the 2012 hack of the Silk Road dark web marketplace.

Keep Reading Show less

U.S. election infrastructure is exceedingly secure, and voter fraud here is so rare it’s comparable to your annual chances of getting struck by lightning. Despite this, former President Donald Trump and a long list of allies in the Republican Party have spent the last two years questioning the overall integrity of the U.S. election system. Many of those allies are now candidates themselves, and their coordinated attack on the country’s status as a democracy is not a relic of 2020. Some have already started repeating these “Big Lie” charges ahead of next week’s midterms. And the social platforms that help them spread their message have prepared few measures to stop it.

Keep Reading Show less

The White House just laid out its climate tech priorities to reach net zero by 2050.

Keep Reading Show less

Coinbase said Thursday that it lost more users in the third quarter. But the decline wasn’t the disastrous drop that Wall Street was expecting, and that sparked a rally in the crypto company’s shares after-hours.

Keep Reading Show less

The Biden administration announced $9 billion in funding Wednesday to improve home efficiency, which could help support the installation of up to 500,000 heat pumps. With winter approaching and utilities warning of gas shortages, there are some major challenges facing the technology that money can be used to tackle.

Keep Reading Show less

Block beat earnings expectations, with strong growth largely fueled by its Cash App business. Traders sent shares up more than 12% after-hours Thursday.

Keep Reading Show less

Stripe is laying off 14% of its staff, its co-founders said Thursday, as the fintech startup must start "building differently for leaner times."

Keep Reading Show less

Roku saw its revenue growth slow in Q3, and warned investors Wednesday that things are about to get worse: “A lot of Q4 ad campaigns are being canceled,” said Roku CEO Anthony Wood during the company’s Q4 earnings call. “We’re seeing lots of big categories pull back. Telecom, insurance … even toy marketers are planning on reducing their spending.”

Keep Reading Show less

Green jobs and corporate climate pledges abound, but skilled sustainability professionals are scarce.

Keep Reading Show less

Robinhood reported a drop in third-quarter revenue but also a narrower loss on Wednesday, in a sign that it might be stabilizing its business as it attempts to recover from a staggering drop in the stock and crypto trading activity that fueled its growth.

Keep Reading Show less
Bulletins