Fidelity Expands Retirement Accounts to Include Cryptocurrencies

Fidelity Investments has expanded its retirement account offerings to include cryptocurrencies, allowing individual investors to hold Bitcoin, Ethereum, and Litecoin directly in their tax-advantaged retirement portfolios. This new service, available to U.S. residents aged 18 and older, enables investors to open a "crypto IRA" and gain exposure to these digital assets through traditional IRAs, Roth IRAs, or rollover options. The assets purchased through this new product are securely stored in cold wallets under Fidelity's custody, ensuring the safety of the investments.

This move by Fidelity comes as financial advisors increasingly recognize the value of digital assets as part of diversified retirement strategies. The demand among Fidelity's clients for a secure and tax-efficient method to invest in cryptocurrencies has been steadily rising. Fidelity has been active in the digital asset space for years, offering a suite of crypto-themed exchange-traded funds (ETFs) that allow investors to track asset prices indirectly. The firm recently filed paperwork to list a Solana ETF on the Cboe exchange, further expanding its presence in the crypto ETF market.

Fidelity's new crypto IRA service is part of its broader commitment to delivering investment choices that align with evolving customer preferences. The firm emphasizes the importance of providing education and guidance alongside new products, ensuring that investors are well-informed about the opportunities and risks associated with digital assets. This initiative underscores Fidelity's dedication to staying at the forefront of financial innovation and meeting the growing demand for cryptocurrency investments in retirement portfolios.

Fidelity has been offering customers the ability to invest in cryptocurrencies for years. In 2022, along with other Wall Street giants, it launched EDX Markets, a crypto exchange for institutional investors. That same year, Fidelity revealed it would allow workers to save 20% of retirement funds in Bitcoin. The Boston-based firm is also one of the top asset managers that received the go-ahead from the SEC last year to launch Bitcoin and Ethereum exchange-traded funds. The Fidelity Wise Origin Bitcoin Fund (FBTC) has generated nearly $11.4 billion in net inflows, the second most among the 11 funds currently trading. Those funds now manage almost $100 billion in assets. The Fidelity Ethereum Fund (FETH), which debuted last July, has received about $1.4 billion in net inflows, the second most among the nine funds currently trading.

This new offering by Fidelity is a significant step forward in the integration of cryptocurrencies into traditional financial services. By allowing investors to hold digital assets in their retirement accounts, Fidelity is providing a secure and tax-efficient way to diversify portfolios and capitalize on the potential growth of cryptocurrencies. This move is expected to attract a wider range of investors who are looking to include digital assets in their long-term investment strategies.