Fidelity is offering 401(k) investors access to bitcoin, the first retirement plan provider to do so

Fidelity Investments said Tuesday it will offer investors the option to put bitcoin in their 401(k)s, making it the first provider to offer crypto for retirement savings.

The crypto offering will be available for 23,000 employers that use Fidelity to administer their retirement accounts by midyear 2022. With $11.3 trillion in assets under administration, Fidelity is the nation’s largest retirement plan provider and its decision could make crypto even more popular and mainstream.

“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,” said Dave Gray, head of workplace retirement offerings and platforms at Fidelity Investments.

Cloud and intelligence firm MicroStrategy will be the first employer to offer bitcoin in their retirement plan. The Wall Street Journal reported the news earlier Monday morning.

Still, regulators have urged caution against involving cryptocurrencies in 401(k)s. Just last month, the Department of Labor asked 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 Department of Labor cited concerns about speculation and volatility as well as high valuation. Meanwhile, it warned of major custodial and record-keeping issues, saying simply losing or forgetting a password can result in the loss of the asset forever.

Fidelity said the digital assets account is a custom plan account that holds bitcoin and short-term money market investments to provide the liquidity needed for the account to facilitate daily transactions on behalf of the investor.

Bitcoin in the DAA will be held on the Fidelity digital assets custody platform to ensure institutional-grade security, Fidelity said.