Cryptocurrency Comes to Retirement Plans as Coinbase Teams Up With 401(k) Provider
A small group of workers will find something new in their 401(k) plan starting in July: the option to invest in cryptocurrency.
ForUsAll Inc., a 401(k) provider, announced earlier this month a deal with the institutional arm of Coinbase Global Inc., COIN 0.93% a leading cryptocurrency exchange, that will allow workers in plans it administers to invest up to 5% of their 401(k) contributions in bitcoin, ether, litecoin, and others.
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With just $1.7 billion in retirement-plan assets, ForUsAll represents a small piece of the $22 trillion retirement-account market. But its embrace of crypto comes at a time of heightened mainstream interest in digital currencies. That said, crypto-investing is virtually nowhere to be found in 401(k) plans and individual retirement accounts at the moment.
“There is way too much volatility,” said Lew Minsky, president of the Defined Contribution Institutional Investment Association, a research and advocacy organization for investment managers, consultants and others in the 401(k) industry. The 401(k) industry is having “meaningful conversations” about adding alternative investments, including private equity, to 401(k) plans, Mr. Minsky said. Currently, 1% of the assets in custom-designed target-date-funds in 401(k) plans are in private equity and 2% are in hedge funds, according to DCIIA. Mr. Minsky said he wasn’t aware of any plans by his organization's members to make cryptocurrency available.
Firms including Fidelity Investments and Charles Schwab Corp. don’t allow customers to buy or sell cryptocurrency in taxable accounts or IRAs. But they can purchase shares in trusts that invest in cryptocurrencies from companies including Grayscale Investments LLC. Fidelity has filed with the Securities and Exchange Commission to offer a cryptocurrency exchange-traded fund.
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https://www.wsj.com/articles/coinbase-teams-up-with-401-k-provider-to-offer-crypto-11623317402 (subscription)
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