United States-based retirement planning provider ForUsAll is teaming up with Coinbase to allow clients to invest up to 5% of their portfolio assets in cryptocurrencies.
The pension provider, which primarily serves small- to medium-sized businesses, is working to offer exposure to over 50 cryptocurrencies in a product called Alt 401(k).
David Ramirez, the firm’s co-founder and chief investment officer, accepted Concerns about offering crypto products in pension portfolios due to their volatility, but argued that US citizens would be “at a disadvantage” if they were not given the option to access crypto assets in their retirement plans:
“The average American may be at a structural disadvantage relative to larger institutions and individuals with higher net worth, and we don’t think that’s right.”
ForUsAll manages $1.7 billion in retirement plan assets, accounting for a tiny fraction of the $22 trillion retirement-account markets.
In the United States, a 401(k) plan is an employer-sponsored defined-contribution pension account defined in subsection 401 of the Internal Revenue Code.
Large institutional investment firms such as Fidelity Investments And Charles Schwab does not allow customers to directly buy or sell cryptocurrencies in taxable accounts or individual retirement accounts. However, they can buy shares in trusts that invest in crypto assets from companies such as Grayscale Investments.
A firm that allows direct purchase of crypto assets and gold for retirement plans bitcoinirai, which was established in 2016. Commenting on ForUsAll’s collaboration with Coinbase, BitcoinIRA’s co-founder and chief operating officer, Chris Kline, said:
“ForUsAll and Coinbase wouldn’t do this if the market didn’t exist. There are people who want that with these types of funds. And they want to access new and exciting things with their 401(k)s.”
MicroStrategy CEO Michael Sayer responded to ForUsAll’s move to adopt crypto.
If you invest 5% of your portfolio in #bitcoinYou have decided to invest 95% of your portfolio in assets to be monetized by bitcoin.
— Michael Saylor (@michael_saylor) June 14, 2021
In April, Cointelegraph reported that pension funds and insurance companies are growing rapidly. Dedicating part of your asset base to bitcoin And crypto assets soared amid the coronavirus pandemic as concerns over inflation.
In May 2020, Kingdom Trust, a regulated custodian that manages more than $13 billion in assets, Launched a retirement account supporting both bitcoin and legacy assets.
The firm noted that when the Internal Revenue Service decided to tax bitcoin, it enabled assets to be placed directly into qualified custodians and retirement accounts.