Fidelity will start allowing investors to place Bitcoin in their 401 (k), but is this retirement vehicle the right place to store cryptocurrency? Therefore, holding alternative assets in a 401 (k) plan, while legal, is not common due to the fiduciary risks of ERISA trustees. However, your employer may allow you to invest in Bitcoin with your 401 (k) funds. Another option is converting 401k to a Gold IRA, which allows you to invest in gold and other precious metals. The advantage of using retirement funds to buy cryptocurrency or converting 401k to Gold IRA is that all profits have tax advantages.
As long as your 401 (k) plan documents allow for alternative assets and the plan administrator allows the investment, you will generally be allowed to purchase cryptocurrency or converting 401k to Gold IRA in your 401 (k) plan. We have a team of IRA specialists, who are well aware of the 401 (k) IRA reinvestment rules to Bitcoin. Most crypto IRAs use an exchange such as Coinbase or Binance to open an account in the name of their IRA where their digital assets are held, and Fidelity is likely to do the same. Unlike a 401 (k) plan, which is subject to the rules of the ERISA plan, an IRA is controlled by the IRA holder.