Fidelity will allow investors access to Bitcoin in their 401(k)s, becoming the first major retirement plan provider to do so

The investing option should be available by mid-year, Fidelity, the nation’s largest 401(k) plan provider, said in a press release. Employers will need to opt in to the change, which may limit which employees actually have access to Bitcoin in their workplace retirement accounts.

That could enable millions of people to invest in the digital asset without the need to set up a separate account on a cryptocurrency exchange.

There are few details currently available about how exactly the account will work, but Fidelity says employees will be able to invest in Bitcoin via what the company is calling the Digital Assets Account, which will be part of the investor’s 401(k). That account will also hold short-term money-market investments to provide the liquidity for transactions.

Employers will be able to set their own limits on how much an employee can contribute to Bitcoin, though Fidelity’s platform allows no more than 20% of a saver’s contributions to be allocated to it, the company said. More digital assets may be added to the 401(k) offerings in the future. The account will have a fee between 0.75% and 0.90% of assets, as well as an additional trading fee, the New York Times reports.

Digital assets are volatile

The announcement comes a little more than a month after the U.S. Department of Labor said it has “serious concerns about plans’ decisions to expose participants to direct investments in cryptocurrencies or related products, such as NFTs, coins, and crypto assets.” Cryptocurrencies, including Bitcoin, are extremely volatile, and financial advisers often recommend against investing solely in digital assets for retirement.

Despite that signaling, Fidelity says investors want access to digital assets like Bitcoin, and doing so through 401(k) contributions will enable them to benefit from dollar-cost averaging and tax deferment.

“There is growing interest from plan sponsors for vehicles that enable them to provide their employees access to digital assets in defined contribution plans, and in turn from individuals with an appetite to incorporate cryptocurrencies into their long-term investment strategies,” Dave Gray, head of workplace retirement offerings and platforms at Fidelity Investments, said in a press release.

Fidelity is the first major retirement-plan provider to add Bitcoin to its core 401(k) offering, but more are likely to follow its lead.