Senators Pen Letter On Fidelity’s Bitcoin 401(k) – Bitcoin Magazine
- US senators wrote an open letter to the CEO of Fidelity regarding the bitcoin 401(k) plan.
- Senators condemned the financial institution for offering bitcoin as an optional retirement investment strategy.
- The senators also acknowledge the struggles of Americans trying to save for retirement, but they don’t seem to understand that traditional finance is the problem.
An open letter from three US senators was sent to the CEO of Fidelity Investments to condemn the company’s recent launch of a bitcoin 401(k) retirement plan.
Senators Elizabeth Warren, Richard Durbin and Tina Smith called Fidelity’s decision to offer exposure to bitcoin through retirement accounts “extremely troubling.”
The senators argue that bitcoin is “a volatile, illiquid and speculative asset” unsuitable for the retirement accounts of US citizens. The lawmakers went on to explain some statistics in detail about the small sum that is, on the median, held in these retirement accounts — $33,472.
Warren and her colleagues then go on to paint a picture of Americans in need of retirement as they live longer than ever before and are likely to outlive their retirement savings.
“This begs the question: when saving for retirement is already a challenge for so many Americans, why would Fidelity allow those who can save to be exposed to an unproven, highly volatile asset like Bitcoin?” the letter said.
It seems that while the senators are able to understand that there is a distinct lack of savings available to a generation of workers who will gradually reach an older age than their predecessors, they lack the ability to discover its true cause. As is often the case in politics, while it is easy to point to a problem, the move away from the backbone – of which traditional financial infrastructure is arguably a part – is often looked down upon as maintaining the status quo.
Fidelity gives customers the opportunity to escape from a doomed system. Additionally, as the senators pointed out in their letter, Fidelity also limits pension investments to bitcoin. By doing this, Fidelity effectively provides the alternative to bitcoin, while preventing investors from placing all their money in that basket.
Fidelity researched Bitcoin, understood its value, and began offering a product with limited exposure to ensure that any volatility the market felt in the short term was not detrimental to anyone’s livelihood. The investment manager also clearly outlines that bitcoin is not a short-term venture and that investors should develop long-term investment strategies.
