Financial services for cryptocurrency holders have evolved over the years as part of the financial technology industry. Now 401 (k) cryptocurrency is included in the mix.
A small 401 (k) provider called ForUsAll now allows members to transfer up to 5% of their retirement funds to cryptocurrency.
The offer includes 50 different cryptoassets, including Bitcoin, which will be held and managed by Coinbase Institutional. The company did not disclose how many of its employer clients have signed up for the offer since its launch earlier this week.
As CEO Jeff Schulte told CNBC’s Power Lunch on Thursday afternoon, providing bitcoin access through 401 (k) s is one way to provide retail investors with easy and affordable access.
“In recent years, we have witnessed tremendous changes in the investment world,” he said. “Institutional investors are increasingly using cryptocurrency as part of their portfolios, you see, Harvard, Brown, Yale, and they all include crypto in their funds. Unfortunately, most Americans do not have access to the same type of assets. “
The offer comes in the middle of an active week at the bitcoin price, which fell 10% earlier in the week, but rebounded and briefly touched $ 37,000 before dropping to the $ 36,000 range. Many remain skeptical that Bitcoin can serve as a reliable store of value given the volatility of its prices, even as consumer prices are rising faster, faster than they have been in recent years.
“It’s not that the jury is out, but the verdict is that owning 0-5% of the cryptocurrency in a well-diversified portfolio can increase the expected growth without significantly increasing volatility, so we think it matters. play. play, ”Schulte said, adding that 60% of“ all professional managers ”say cryptocurrencies now play a role in their portfolios.
As of the end of 2020, the 401 (k) plan is $ 6.7 trillion, according to the Investment Firms Institute, which is about one-fifth of the $ 34.9 trillion U.S. pension market.
ForUsAll manages $ 1.7 billion in assets for 70,000 employees.
“The 401 (k) industry usually changes slowly,” Schulte said. “As a smaller player, we can see what is happening in the market, recognize absolutely compelling trends and take the lead because we believe the time has come. All Americans are not only appropriate, but also appropriate. “
ForUsAll claims to be the first company to offer cryptocurrency for 401 (k) s. Other companies are working on cryptocurrency retirement proposals, including Kingdom Trust, which offers a hybrid, self-service retirement platform where investors can buy, sell, or hold stocks, ETFs and cryptoassets on a single tax-exempt account.