Coinbase, one of the largest crypto exchanges has entered into a partnership with 401(k) pension plan provider ForUsAll Inc to allow plan holders to invest in cryptocurrencies. The partnership would let 401(k) pension plan holders invest upto 5% of their balance in crypto assets.
There is little to zero crypto exposure in 401(k) pension plans or individual retirement accounts. Industry insiders cite the high volatility of the crypto market as the reason against its adoption while many advocate at least 1% of these retirement plans should include a crypto portfolio.
The pension and Retirement account market is a $22 trillion industry and ForUsAll represents a very small $1.7 billion market. However, it could lead the path for several other retirement plan providers in the coming times. The pension plan provider also becomes the first firm to offer direct crypto exposure to its clients. Some of Fidelity and Schwab’s admistratered 401(k) accounts do allow the purchase of some of the Grayscale offered products but none have shown any intention of direct crypto exposure citing strong volatility in the crypto market.
Pension Fund Industry Having Discussions Over Allowing Crypto Investments
The WSJ report indicated that the pension fund market is having meaningful full discussions around crypto investments in retirement plans. Crypto assets have started to pop up in institutional portfolios including KiwiSaver retirement savings in New Zealand.
ForUsAll clients who opt for the new crypto investment plan can transfer up to 5% of their account balances into a self-directed cryptocurrency window that uses Coinbase’s institutional trading platform. This Coinbase trading window will offer access to all of the 50 crypto assets listed on the exchange. Employees can also invest up to 5% of each payroll contribution in cryptocurrency.