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US-based pension plan provider ForUsAll is partnering with Coinbase to allow customers to invest up to 5% of their portfolio assets in cryptocurrencies.
The pension provider, which primarily serves small and medium-sized businesses, strives to provide exposure to over 50 cryptocurrencies in a product called Alt 401 (k).
The company’s co-founder and chief investment officer David Ramirez acknowledged concerns about the offering of crypto products in retirement portfolios due to their volatility, but argued that US citizens would be at a disadvantage if they did not. were unable to access crypto assets upon retirement. plans:
The average American can be structurally disadvantaged compared to large institutions and high net worth individuals, and we just don’t think that’s fair.
ForUsAll manages $ 1.7 billion in pension plan assets, which is a small portion of the $ 22 trillion retirement account markets.
In the United States, a 401 (k) plan is an employer-sponsored defined contribution retirement account, defined in Section 401 of the Internal Revenue Code.
Large institutional investment firms such as Fidelity Investments and Charles Schwab do not allow clients to directly buy or sell cryptocurrency 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.
One company that allows the direct purchase of crypto assets and gold for retirement plans is Bitcoin IRA, which was founded in 2016. Commenting on ForUsAll’s collaboration with Coinbase, Chris Kline, co-founder and director of the ‘Bitcoin IRA mining said:
ForUsAll and Coinbase wouldn’t do this if there was no market. There are people who want that with these types of funds. And they want to have access to new and exciting things with their 401 (k) s.
MicroStrategy CEO Michael Saylor has responded to ForUsAll’s decision to embrace crypto.
In April, Cointelegraph reported that pension funds and insurance companies were increasingly devoting a portion of their assets to Bitcoin (BTC) and crypto assets, as concerns about inflation escalated in the midst of the coronavirus pandemic.
In May 2020, Kingdom Trust, a regulated custodian with over $ 13 billion in assets, launched a retirement account supporting both Bitcoin and legacy assets.
The company noted that when the Internal Revenue Service decided to tax Bitcoin, it directly allowed the asset to be held by qualified custodians and in retirement accounts.
This article originally appeared on Investing.com.
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