To recap, the 401(k) is the most popular private pension plan in the US. It allows employees to contribute a portion of their salary to their personal retirement savings accounts before income tax. These funds are then invested in securities, but now they can also be allocated to Bitcoin.

This scheme is beneficial to ordinary citizens, as users do not have to pay income tax and lose a certain portion of their earnings. Instead, the full amount allocated goes towards the purchase of an asset. BTC is likely to become a popular investment among workers, as people have heard about the ability of cryptocurrencies to grow. Bitcoins will then be actively purchased and held by companies. Consequently, BTC will have more reason to grow because of the purchases.

How cryptocurrencies become more popular

Note that an investment in a cryptocurrency within a 401(k) can only take place after the employer has consented. The fact of consent allows up to 20 per cent of a retirement plan client’s investment portfolio to be placed in Bitcoin. Fidelity is still discussing the intricacies of BTC integration, with MicroStrategy, the largest institutional investor in the major cryptocurrency, having already given its consent to work with crypto in a 401(k) for its employees.

Here’s a relevant quote from Twitter.

As MicroStrategy continues to be one of the most disruptive Bitcoin companies among other corporations, we plan to offer our employees the opportunity to invest in BTC as part of a 401(k) portfolio.

Fidelity Investments

Dave Gray, head of retirement offerings and workplace platforms at Fidelity Investments, said the decision to offer Bitcoin to 401(k) plan holders was based on strong customer demand:

“We have started to see a growing interest in how we can offer Bitcoin or digital assets in a retirement plan. We fully expect cryptocurrency to shape how future generations think about investing in the near and long term.

Gray also noted that beyond the initial support for Bitcoin, the company will be adding other crypto-assets to the investment option depending on customer demand. All of this is a huge leap in the popularity of the crypto market. Previously, crypto wasn’t as popular among the older population, but now even they can join the club of Bitcoin fans.

When to save crypto for retirement

According to Cointelegraph sources, the idea of including cryptocurrency in retirement plans has been floated before. For example, ForUsAll, a 401(k) services company, has partnered with major US cryptocurrency exchange Coinbase in 2021 to allow its customers to invest in BTC through a retirement plan. However, the presence of a major player like Fidelity is sure to make the idea more appealing in the eyes of many employees of thousands of companies across America.

As a reminder, MicroStrategy is the largest bitcoin holder among public companies. At the moment, the giant has 129,218 BTC in its possession with $3.96 billion in spending. That said, even today, with the market not at its best and Bitcoin at 39,000, this amount is equivalent to 5.05 billion. Consequently, the company invested early enough to be in the black even in market crashes.

Ranking of public companies by savings volume


We believe that this event will indeed be an extremely important catalyst in Bitcoin's rise in popularity. In this case, there are two reasons enough for users: the lack of taxation on the amount allocated, and the cryptocurrency's ability to grow in value over long periods of time. Therefore, we want to believe that in this way there will be much more BTC buyers around the world, which will make digital assets no longer be something distant for most ordinary people.

Look for even more interesting things in our millionaires’ cryptochat. There we will discuss other important topics related to the blockchain and decentralisation industry.