For more than a year bitcoin and other cryptocurrencies have been making headlines, and its skyrocketing value has investors asking when it will become an investment menu option for their 401(k) or other retirement savings plans. DWC Managing Partner Keith Clark answers that question in a article published on the Kiplinger website.
“Currently, no mutual fund, collective investment fund or ETF in the United States has a fund exclusively investing in bitcoin or cryptocurrency,” Clark wrote. “It is possible to purchase bitcoin futures on certain exchanges; however, these can only be accessed by brokerage accounts that permit purchases in these exchanges.”
Excerpts from the Kiplinger Article:
- Bitcoin owners store and track their bitcoin in wallets. A plan sponsor generally holds one position of each security on behalf of all participants. That means someone must hold the password for the wallet, which could be the plan sponsor or their selected recordkeeping provider. A bitcoin wallet has one password, and there is no reset. If that password is ever lost, your bitcoin is lost.
- The question a fiduciary must ask is whether they want to permit investments that are not regulated in any way, shape or form by any government. Plan sponsors are reluctant to offer cryptocurrency as an investment option because of the volatility, lack of risk analysis, lack of government oversight and the hassle factor involved in administration.
- Bitcoin is available for investment with your monies outside of a company plan. You can already access it through a self-directed IRA, which could be a good option as it encourages investors to do this outside their 401(k) plan with IRA or after-tax monies.