These U.S. Senators Want To Know Why Fidelity Is Offering Bitcoin Retirement Plans
A group of U.S. Senator addressed a letter to Abigail Johnson, CEO of investment firm Fidelity, regarding its Bitcoin retirement plans. The document was signed by Senators Elizabeth Warren, Richard Durbin, and Tina Smith.
Related Reading | Crypto Futures Market Sees $400m Flushed As Bitcoin Breaks $23k
The investment firm launched its Bitcoin-based 401 (k) plans back in May 2022. This provides U.S. citizens the chance to gain exposure to cryptocurrency with this popular vehicle aimed at long-term investing.
In the documents, the government officials demand Fidelity disclose “why” it is offering a Bitcoin retirement plan. The Senators believe this offering is “ill-advised for one of the leading names in the world of finance to endorse”.
In that sense, they claimed Bitcoin is a “volatile, illiquid, and speculative asset” unable to provide its users with “steady returns over time”, the document says. Retirement investment vehicles in the country are already part of a “precarious system”.
Investing in Bitcoin, the Senators said, could worsen the retirement conditions for U.S. citizens. The government officials emphasized BTC’s volatile and “untested” nature in global markets.
The Bitcoin network was launched in 2009 by Satoshi Nakamoto, the underlying asset (BTC) that has allowed millions of people to trade trillions in total volume across a decade of existence. In that time, cryptocurrency has been appreciated multiple times.
BTC’s price rallying since 2018 on the daily chart. Source: BTCUSDT Tradingview
Despite these facts, the U.S. Senators said the following to Fidelity’s CEO:
While we appreciate Fidelity’s efforts to help working Americans realize a more secure retirement, this decision is immensely troubling. Perhaps most troubling is that in pointing to the risks of investing in Bitcoin on its website and planning to cap plan participants’ Bitcoin exposure to 20 percent, Fidelity is acknowledging it is well aware of the dangers associated with investing in Bitcoin (…).
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The Senators attempted to argue that Bitcoin and cryptocurrencies have been a bad investment. BTC’s price has lost over 50% of its value in that period, topping at around $69,000, and highlighted that blockchain technology shows more “promise”.
This is the usual argument used by BTC detractors. As Bitcoinist reported, this is not the first time these U.S. Senators have made demands.
When Fidelity announced their product, Elizabeth Warren and the company demanded information on their Bitcoin-based retirement plan. At that time, the U.S. Senators said Fidelity was disregarding a warning issued by the U.S. Department of Labor about crypto investment.
Despite these attempts to apparently dissuade the investment firm from offering their BTC product, Fidelity has persisted. The U.S. Senators concluded their second letter addressed to Fidelity by calling BTC investment with the following:
This asset class is unwieldy, immensely complex, unregulated, and highly volatile. Working families’ retirement accounts are no place to experiment with unregulated asset classes that have yet to demonstrate their value over time.