This small 401 (k) provider wants to bring cryptocurrency into Americans’ pension funds
Financial services for cryptocurrency holders have been growing as a subset of the fintech industry for years. Now crypto 401 (k) s come into the mix.
A small 401 (k) provider called ForUsAll is now allowing attendees to invest up to 5% of their retirement savings in cryptocurrency.
The offering includes 50 different crypto assets, including Bitcoin, which are held and managed by Coinbase Institutional. The company didn’t say how many of its employer customers have signed up for the offer since it was launched earlier this week.
Delivering Bitcoin over 401 (k) s is one way to provide simple and accessible exposure for retail investors, CEO Jeff Schulte said at CNBC’s “Power Lunch” Thursday afternoon.
“We have seen tremendous upheaval in the investment world over the past few years,” he said. “Institutional investors are increasingly using cryptocurrencies as part of their portfolios. Harvard, Brown, and Yale all include cryptocurrencies in their foundations. Unfortunately, most Americans don’t have access to the same types of assets. “
The offering takes place in the middle of an active week for Bitcoin price, which fell 10% earlier in the week but has rebounded to hit $ 37,000 for a short time before returning to the $ 36,000 area. Many are still skeptical that, given its price volatility, Bitcoin can serve as a reliable store of value, even if consumer prices are rising faster than they have been in years.
“It’s not that the jury hasn’t decided, but the verdict is clear: holding 0-5% of the cryptocurrency as part of a well-diversified portfolio has the ability to increase expected growth without significantly increasing volatility play, “said Schulte, adding that 60% of all” professional managers “say crypto is now playing a role in their portfolios.
According to the Investment Company Institute, there is $ 6.7 trillion in 401 (k) plans as of the end of 2020, which is roughly one-fifth of the U.S. fixed income market of $ 34.9 trillion.
ForUsAll manages $ 1.7 billion in assets for 70,000 employees.
“The 401 (k) industry is usually slow moving,” said Schulte. “The fact that we’re a smaller player allows us to see what’s going on in the market, spot absolutely irrefutable trends, and take a leadership position because we think the time is right all American isn’t only appropriate, but right. “
ForUsAll says it will be the first company to offer crypto in 401 (k) s. Other companies are working on crypto retirement offerings, including Kingdom Trust, which offers a hybrid, self-service retirement platform that allows investors to buy, sell or hold stocks, ETFs and crypto assets on a single tax-deferred account.