Bitcoin 401(k) Retirement Plans Coming in 2021

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  • The first ERISA-compliant Bitcoin 401(k) retirement plans will be offered by Digital Asset Investment Management in 2021
  • The plans allow investors to have up to a 10% allocation of Bitcoin in their 401(k)
  • The development marks another chapter in Bitcoin’s story of adoption

It’s been a long time coming, but one of the most anticipated symbols of Bitcoin mass adoption is on the horizon – a Bitcoin 401(k) retirement plan will be coming in 2021. Last Friday, Digital Asset Investment Management (DAiM) announced that next year would see the launch of the first employer-sponsored 401(k) plans containing Bitcoin that are compliant with the Employee Retirement Income Security Act of 1974 (ERISA).

DAiM Criticizes “Restrictive” Retirement Plans

DAiM has been running an employer-sponsored Bitcoin 401(k) since October 2019, following its accreditation in June 2018. Since this time, it says, it has seen “incredible inbound demand from individuals eager to invest Bitcoin in 401(k)s”, something that, for obvious reasons, hasn’t been encouraged by regulators.

In its press release announcing the news, DAiM criticized traditional retirement plans for being “restrictive” and lacking investment options, leading to a “bad deal” as investors barely earn enough to keep up with the rate of inflation. Bitcoin, they say, offers investors something different:

We believe Bitcoin has demonstrated it has a place in the modern portfolio and individuals should have an opportunity to “Get Off Zero” and invest directly through their retirement account.

Bitcoin 401(k) Illustrates Growing Adoption

DAiM will serve as the advisor and fiduciary to the plan, which allows companies to create a Bitcoin 401(k) that can contain up to 10% of the cryptocurrency. The Bitcoin that backs the plans will be held by Gemini Trust, with employees allowed to transfer their Bitcoin out should they leave the company.

The introduction of a Bitcoin 401(k) retirement plan echoes the acceptance that Bitcoin has gained in institutional circles since it came to prominence in 2017, and in many ways sums up the shifting attitude towards it. Prior to 2020 you wouldn’t have bet a hair on your head that a Bitcoin 401(k) pension plan would be allowed, and yet here we are.

Full steam ahead for an ETF…