Three senators chastised Fidelity for offering a bitcoin 401(k) option claiming it is too volatile and untested to be used as a retirement savings tool.
Senators Elizabeth Warren, Richard Durbin and Tina Smith called Fidelity’s decision to offer exposure to bitcoin through retirement accounts “immensely troubling.”
The senators argue that bitcoin is “a volatile, illiquid, and speculative asset” unfit for the retirement accounts of U.S. citizens. The legislators continued to explain some statistics in detailing the small amount of money that is, on the median, held on these retirement accounts –– $33,472.
Warren and her colleagues then proceed to paint a picture of Americans in need of their retirement as they are living longer than ever before and are likely to outlast their retirement savings.
“This begs the question: when saving for retirement is already a challenge for so many Americans, why would Fidelity allow those who can save to be exposed to an untested, highly volatile asset like Bitcoin?,” reads the letter.
It seems that while the senators are capable of understanding there is a distinct lack of savings available to a generation of workers that will progressively reach a higher age than their predecessors, they lack the ability to spot its true cause. As is often the case in politics, while it is easy to point out a problem, the move away from the backboning cause – of which traditional finance infrastructures are arguably a part – is often looked down upon to maintain the status quo.
Fidelity is providing the optionality of escape from a doomed system for its customers. Additionally, as the senators pointed out in their letter, Fidelity also caps retirement investment allocations to bitcoin. By doing this, Fidelity is effectively providing the optionality of bitcoin while preventing investors from placing all of their funds in that basket.
