Starting next month, 401(k) provider ForUsAll will allow plan participants to invest in cryptocurrencies, reports the Wall Street Journal.
In a deal with crypto exchange Coinbase Global, ForUsAll participants will be able to invest up to 5% of their 401(k) contributions in cryptocurrencies, including Bitcoin and Ethereum.
A relatively small company and a newcomer to the retirement account market, ForUsAll is the first company to incorporate crypto-investing into retirement planning.
Most 401(k) providers remain hesitant to integrate crypto investing into their plans, and Fidelity Investments and Charles Schwab do not allow customers to buy and sell crypto in taxable accounts or IRAs.
However, investors can purchase shares of crypto asset trusts, like Grayscale’s crypto funds, or crypto-adjacent ETFs, like digital asset ETFs, in regular brokerage accounts.
When asked about the hesitancy of many larger firms to allow participants to invest in cryptos, ForUsAll founder and CIO, David Ramirez told Barron’s he understands the hesitation, “but if we do not, the average American may be at a structural disadvantage relative to large institutions and high net worth individuals and we just don’t think that’s right.”
ForUsAll isn’t the only option available for investors looking to invest in crypto assets for retirement, however.
BitcoinIRA is a trading platform which allows users to buy and sell cryptos and gold for their IRAs. Co-founder and CIO Chris Kline told Barron’s that ForUsAll and Coinbase’s plan shows that there is a market for this kind of crypto-invested retirement planning.
“There are people that want this with these types of funds. And they want to have access to new and exciting things with their 401(k)s,” added Kline.
Will Bitcoin begin to creep into retirement planning? It might, but not everyone thinks that’s a great idea.
David John, senior strategic policy advisor at AARP Public Policy Institute, believes including crypto in retirement planning is an unnecessary attention grab, similar to companies offering 401(k) debit cards in 2008.
Additionally, cryptocurrency is a volatile and unpredictable investment, one that does not necessarily lend itself to building the long-term stable wealth 401(k)s aim to create and maintain.
According to ForUsAll, participants will be alerted if their crypto investments exceed 5% and advised to transfer the excess into stocks and bonds.
The limit will help to protect participants from the volatility of the crypto economy, says ForUsAll, while still offering opportunities for exposure to the potential benefits of holding crypto assets.
For more news, information, and strategy, visit the Crypto Channel.