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Does #bitcoin 
belong as an investment option in a #401k?
As of right now, I don't think so.
here's a thread on why.
belong as an investment option in a #401k? As of right now, I don't think so.
here's a thread on why.
1/ When a company offers up a 401(k) benefit to their EEs they have a fiduciary duty.
That fiduciary duty means they make decisions for the benefit of the employees, including deciding what investment options to allow.
That fiduciary duty means they make decisions for the benefit of the employees, including deciding what investment options to allow.
2/ The past few years, especially 2020, saw a big increase in 401(k) fiduciary lawsuits. Many of these lawsuits where centered on the fiduciaries decision process (or assumed lack of process) in selecting and monitoring investment options the employees have to choose from.
3/ The increase in lawsuits stemming from the selection of certain target date funds (as reported by @JacklynWille ) has highlighted how precarious a position fiduciaries can be put in just by doing what they believe is the right thing for their employees.
4/ So, the rise in the 401k fiduciary lawsuits is 1 reason I don’t think you’ll see Bitcoin as an asset in the near future in 401ks.
Fiduciaries won’t want to put an asset in a 401k that may lead to lawsuits.
Fiduciaries won’t want to put an asset in a 401k that may lead to lawsuits.
5/The second reason I don’t think you’ll see it as an asset is the custodian issues.
Financial advisors are finding it hard to provide guidance on this asset class for their clients since they can’t take custody of it.
Financial advisors are finding it hard to provide guidance on this asset class for their clients since they can’t take custody of it.
6/ Until financial advisors have some more explicit rules of engagement about providing advice and guidance on Bitcoin, don’t expect to see it as an investment option soon.
Maybe @Onrampinvest will solve this.
Maybe @Onrampinvest will solve this.
7/Until more guidance comes out from the DOL on how Bitcoin should be treated as an asset, fiduciary plan advisors will be very hesitant to recommend it.
Which will slow the adoption in 401ks.
Which will slow the adoption in 401ks.
8/Bitcoin may continue to be a very interesting asset.
However, for the reasons I laid out above I do not think you’ll be seeing it widely available in 401ks soon.
However, for the reasons I laid out above I do not think you’ll be seeing it widely available in 401ks soon.
