US House of Representatives Introduces Bill Allowing Bitcoin in 401(k) Retirement Plans

On Friday, Congressman Byron Donalds (R-FL) Bill To the House of Representatives allowing Americans to include Bitcoin in their 401(k) retirement plans.

The bill serves as the House companion to the Senate’s Financial Freedom Act of 2022, introduced earlier this month. Congressman Donalds’ bill would prohibit President Biden’s Department of Labor from limiting the types of investments that self-directed 401(k) account investors can make through brokerages.

Is your fidelity at risk?

Last month, Fidelity announced that it would allow 401(k) retirement plan participants to allocate a portion of their investment in Bitcoin, shortly after the Department of Labor recommended it to 401(k) providers. We currently offer 401(k) retirement plans to more than 23,000 companies.

“In the early stages of cryptocurrency history, the department has serious concerns about the prudence of fiduciary decisions to expose participants in 401(k) plans to direct investments in cryptocurrencies or other crypto-linked products.”

in a recent interview wall street journalThe department has expressed concern about what Fidelity Investments has done.

“We have serious concerns about what Fidelity has done,” said Ali Kawar, deputy assistant secretary of the Employee Benefits Security Department. The administration regulates company-sponsored retirement plans within the Department of Labor.

“In a broad and sweeping effort to centralize power in Washington, the Biden administration is now attempting to dictate how Americans invest their hard-earned money.” said Congressman Donald.

“This administration and other government agencies do not have the authority to dictate the financial future of American investors,” he said.

Bill gains Republican support

Donalds tweeted that Senator Tommy Tuberville of Alabama would push the bill forward in the Senate with the support of Representative Tom Emmer from Minnesota’s District 6 district.

“@RepDonaldsPress and @SenTuberville are proud to support the Financial Freedom Act 2022,” said Emmer. Tweet.

Ohio District 8 Assemblyman Warren Davidson Rep. Kim YoungHe serves as the US representative for California’s 39.One US House of Representatives from the Congressional District and Arizona’s 6th Congressional District also expressed support for the measure.

Senator Tuberville said, “People can retire comfortably by working for decades, living within their own income limits, and investing wisely.”

“Now the Biden administration is making its own decisions about which assets are worth investing in retirement, and by issuing regulatory guidelines targeting cryptocurrencies, it is making decisions for individual investors. This is the best government glut. The government has nothing to stop retired savers from making their own investment choices. How you invest your money when you get paid is up to you. Our law makes it clear that it is true.”

Weaknesses of Fidelity Products

Some experts believe that Fidelity two important factors Investments – Lack of diversity and allocation size.

Matt Hougan, Chief Investment Officer at Bitwise Asset Management, argues that offering only one or two cryptocurrencies is not ideal.

He argues that “the best approach for most investors looking for long-term allocations to cryptocurrencies is to own a diversified and regularly rebalanced index that will adapt to evolving markets.”

Hougan believes that employers will eventually require cryptocurrencies to be added to their 401(k) plans because employees will welcome the move despite short-term refusal from regulators.

David Ramirez, chief investment officer at 401(k) provider ForUsAll, said the company provides exposure to a variety of institutional-adopted cryptocurrencies.

Crypto Experts Suggest The 20% Bitcoin Allocation Is Too High

Adam Bergman of IRA Financial Group asserts that “20% is quite high for most investors for 401(k) plans where the employer has fiduciary responsibility for the plan participants.” The company allows its clients to invest in a variety of cryptocurrencies.

Bergman believes that the allocation to cryptocurrencies should be between 1 and 5% of the portfolio.

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