US Senators Urge Fiduciary Giant To Think Twice About Offering Bitcoin (BTC) 401(k) Plans

US Senators Urge Fiduciary Giant To Think Twice About Offering Bitcoin (BTC) 401(k) Plans

US senators are asking financial giant Fidelity for the second time to reconsider offering Bitcoin (BTC) as an investment in 401(k) retirement accounts.

In a letter to Fidelity CEO Abigail Johnson, US Senators Richard Durbin, Elizabeth Warren and Tina Smith say the recent collapse of the FTX cryptocurrency exchange underscores their position that Bitcoin is too risky for workers’ pension investments.

The senators had previously opposed the move when Fidelity announced the Bitcoin offering in April.

β€œIn light of the recent stunning events in the digital asset market, we are writing today as a follow-up to our previous letter sent on July 26, 2022. Once again, we strongly urge Fidelity Investments to reconsider its decision to allow 401(k) ) plan sponsors to expose plan participants to Bitcoin. Since our last letter, the digital asset industry has only become more volatile, turbulent and chaotic – all features of an asset class that no plan sponsor or retirement saver would want to come close to.”

They claim that a handful of young and charismatic people in the crypto space have manipulated Bitcoin’s price. They point to Bitcoin’s value collapsing by more than 20% after the FTX collapse.

“The recent implosion of FTX, a cryptocurrency exchange, has made it abundantly clear that the digital asset industry is in serious trouble. The industry is full of charismatic wunderkinds, opportunistic scammers, and self-proclaimed investment advisors who market financial products with little or no transparency. As a result, the bad, deceptive and potentially illegal actions of a few have a direct impact on the valuation of Bitcoin and other digital assets.”

The senators say there is already a crisis for retirement savings, and adding riskier investments could worsen the situation. Fidelity is home to workplace retirement accounts for 32 million Americans and 22,000 employers.

“In light of these risks and continuing warning signs, we again strongly urge Fidelity Investments to do what is best for plan sponsors and plan participants – seriously reconsider its decision to allow plan sponsors to offer Bitcoin exposure to plan participants. By many measures, we are already in a pension crisis, and it should not be made worse by exposing pension savings to unnecessary risk. Any investment strategy based on catching lightning in a bottle, or motivated by the fear of missing out, is doomed to failure.”

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