Sunday, September 25, 2022

MicroStrategy Becomes the First Subscriber to Fidelity’s Bitcoin-Backed 401(k) Account

The CEO of MicroStrategy and prominent Bitcoin (BTC) crusader, Michael Saylor has announced plans to integrate digital assets into his company’s employee 401(K) retirement plan account. The announcement was made via a tweet on his official Twitter handle.

This development follows closely after an announcement from Fidelity Investments, informing the United States public that the financial services firm, which is the largest provider of reliable 401 (K) retirement plans in the US, has now created an account where its subscribers can save for their pensions through Bitcoin investments.

The Boston-based financial services company adopted this new service plan owing to numerous public demands seeking an option in virtual assets retirement plan investments. Subscribers of the virtual assets account are to pay a fee at the rate of between 0.75% to 0.90% of the total value in the account for maintenance.

Commenting on the innovative move, Dave Gray, the chief of workplace retirement offerings and platforms for Fidelity Investments said the company is elated to be the first in offering a retirement savings plan in virtual assets. He added that the recent development is birthed from a “growing interest” from employers of labor to provide their employees with a digital assets infrastructure in their “contribution plans”.

There are however concerns about the stance of the US Department of Labor on the recent development, owing to a press release that was issued by the regulator last month. 

In the release dubbed Compliance Assistance Release No. 2022-01, the regulator noted that it “has serious concerns about the prudence of a fiduciary’s decision to expose a 401(k) plan’s participants to direct investments in cryptocurrencies”, adding that such investments pose remarkable risks and uncertainties to the holder of the account. Hence, extreme care should be deployed before considering a crypto retirement plan on behalf of the user.

Despite obvious risks involved in patronizing the bitcoin pensions account, Michael Saylor emerged as the first employer to subscribe to the Fidelity Digital Assets Account.

Michael Saylor is a dogged advocate of bitcoin holdings and under his leadership, his company now currently holds a pot of 129,218 BTC units, being the only firm in the world that possesses such an amount of the digital asset.

Israel Love
Israel Love is a passionate writer that enjoys educating and inspiring people through his writing. This passion fuels the desire to simplify the complexities in the blockchain ecosystem, by providing viable information about the crypto space in such a way that makes it easy for anyone to understand. Israel love also has interests in Human Resource Management as he is a trained expert in HR.

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