As Bitcoin hovered around $38,000 last April—down 45% from its peak—Fidelity Investments announced its customers could soon add the digital asset to their retirement accounts through a first-of-its-kind offering.
By the time the firm’s 401(k) product launched the following fall, the value of Bitcoin had sunk even more, hammered throughout the summer by a tightening economy and fallout from the $60 billion implosion of cryptocurrencies Luna and TerraUSD. Bitcoin was changing hands at $20,000 by early November.
And then the crypto exchange FTX, once valued at $32 billion, buckled in Chapter 11 bankruptcy, casting a shadow over crypto as contagion from its collapse spread like wildfire. The exchange’s swift demise would shake confidence in digital assets even further, dragging down Bitcoin as far as $15,480, its lowest price in two years.
It was just about the worst timing for a trusted name with seven decades of investment management experience to offer crypto to retirement savers.
A group of U.S. senators, including Elizabeth Warren and Dick Durbin, urged Fidelity to reconsider its Bitcoin embrace, arguing that digital assets exposed retirement savers to unnecessary risk. “Any investment strategy based on catching lightning in a bottle, or motivated by the fear of missing out, is doomed to fail,” they stated in a letter. “We are already in a retirement security crisis, and it should not be made worse.”
But Fidelity’s Bitcoin offering still stands. It’s “offering a responsible option for plan sponsors who want to meet the interest in crypto,” a company spokesperson said.
And Fidelity is just one of many sizable firms that has not backed away—it continues to publicly declare that digital assets are rife with opportunity.
