US Senators Concerned About Fidelity and Its Bitcoin 401k Plans
Three senators are calling out Fidelity Investments in a letter to reconsider its decision to offer Bitcoin Retirement plans. Especially after the FTX collapse. Although there are still fears of the looming recessionary cycle.
Fidelity, one of the largest asset managers globally, has been a loyal advocate of Bitcoin adoption. Be it in mining or allowing users to add crypto to their retirement portfolio.
As BeInCrypto reported in April, Fidelity Investments, the largest provider of 401k plans in the US, allowed workers to put Bitcoin into their 401(k) retirement accounts. Senators raised red flags over this decision then and even more so now.
Raise red flags
Democratic Senators Richard J. Durbin, Elizabeth Warren and Tina Smith raised concerns over Fidelity’s Bitcoin retirement offering. They added that the industry has become increasingly “volatile, turbulent and chaotic.”
In a signed document directed at Abigail Johnson, the CEO of the investment firm “urged Fidelity Investments to reconsider its decision to allow 401(k) plan sponsors to expose participants to Bitcoin.”
“Fidelity Investments has chosen to expand beyond traditional finance and delve into the highly volatile and increasingly risky digital asset market.
The message went on to include the recent collapse of the FTX exchange:
“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.”
Therefore, the firm urged to “seriously reconsider its decision to allow plan sponsors to offer Bitcoin exposure to plan participants.”
Johnson had not responded to the letter by press time.
Recession claims to rise: Can BTC help?
The World Bank report predicted a continuous global downturn that will spread down to the global south. It says a global recession is already in the making as central banks have raised interest rates with a degree of synchronicity not witnessed in the past 50 years.
Other leaders have also voiced similar concerns:
Interestingly, Bitcoin traces its roots to the recession of 2007/08 and was born out of the last recession cycle in 2009. Founder Satoshi Nakamoto wrote about the bailout of UK banks in the genesis block of Bitcoin 13 years ago.
How Bitcoin reacts to this type of economic environment is a key point of interest for investors. There have been long-standing claims that Bitcoin would perform very well in times of recession and high inflation.
But looking at the intense selling pressure, BTC witnessed a massive fall. It fell from its all-time high of $69,000 to trade below $16,000.
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