Fidelity Investments has introduced a new Individual Retirement Account (IRA) that allows direct investment in cryptocurrency, including Bitcoin, Ethereum, and Litecoin. This plan is the first in the U.S. to offer clients the option to include crypto assets in their retirement savings.
This is reported by Finway
According to the terms, purchased digital assets will be stored in cold wallets. The retirement plan is available to U.S. citizens who are at least 18 years old. Fund transfers are conducted through a traditional brokerage IRA, with Fidelity Digital Assets acting as the custodian and intermediary for buying/selling. This division charges a 1% spread on transactions, with no fees for opening or closing an account.
Retirement Plan Options and Taxation
Clients can choose from three options for the new IRA:
- Roth IRA: investment without capital gains tax;
- Traditional IRA: provides deferral of income tax payments;
- Rollover IRA: a transitional plan for those looking to convert a traditional 401(k) plan into a cryptocurrency plan.
A representative from Fidelity Investments commented to CoinDesk that the launch of the new retirement plan is a response to the growing demand from clients interested in investing in crypto assets. Fidelity Investments, being the first major company in the U.S. to offer clients a 401(k) plan with the option to invest in cryptocurrencies, implemented relevant changes in April 2022. At that time, the company faced criticism from the White House administration due to investment restrictions that applied only to Bitcoin, allowing no more than 20% of retirement contributions to be allocated to this cryptocurrency.
Experts believe that the launch of spot Bitcoin ETFs in December 2023 may lead to further changes in retirement plans, reflecting the ongoing evolution of the cryptocurrency market.