Fidelity Launches Crypto IRAs for Bitcoin, Ethereum, Litecoin
2min read Fidelity Investments has introduced a new range of retirement plans that offer investors exposure to three major cryptocurrencies: Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC). This innovative product is available to US citizens over the age of 18 who reside in states where fidelity digital Assets supports crypto individual retirement arrangements (IRAs). The asset manager is providing three distinct IRA plans to cater to different investment preferences and needs.
The first plan is a tax-free Roth IRA, which allows investors to save for retirement using money that has already been taxed. The second plan is a more traditional IRA, which offers tax-deferred potential earnings growth. The third plan is a Rollover IRA, enabling investors to transfer funds from a former employer’s plan, such as a 401(k) or 403(b), to an IRA.
To open a fidelity Crypto IRA, investors must also hold a Fidelity brokerage IRA with the same registration type, which serves as a funding account. Users can transfer funds from the linked brokerage IRA into the crypto IRA to execute trades. If an individual does not already hold a qualifying Fidelity brokerage IRA, the firm will open one in parallel when setting up the crypto IRA.
Fidelity’s decision to include only Bitcoin, Ethereum, and Litecoin in these retirement plans reflects a focus on established assets with relatively higher market capitalization and liquidity. This approach ensures that investors have access to some of the most well-known and widely traded cryptocurrencies, providing a level of stability and familiarity.
Opening and maintaining a Fidelity Crypto IRA, as well as associated custody services for digital assets, will not carry a fee for customers. However, Fidelity Digital Assets will apply a 1% spread to buy and sell orders. This spread represents the difference between the price a client receives and the price at which Fidelity Digital Assets sources the asset to fill the order. This fee structure ensures that investors can access cryptocurrency investments without incurring high maintenance costs, while still covering the operational expenses associated with managing digital assets.
The offering allows users to retain familiar features of traditional Fidelity retirement accounts, including beneficiary management. The designated beneficiaries for the Fidelity Crypto IRA mirror those established on the user’s linked brokerage IRA. Customers can make changes to beneficiaries through the brokerage IRA platform, ensuring a seamless and convenient experience.
This move is the latest from Fidelity Digital Assets, the arm of Fidelity that focuses on crypto custody, trading, and management. By expanding its offerings to include cryptocurrency retirement plans, Fidelity is positioning itself as a leader in the integration of traditional financial services with emerging digital asset technologies. This initiative not only provides investors with new opportunities to diversify their retirement portfolios but also underscores Fidelity’s commitment to innovation and adaptability in the ever-evolving financial landscape.
Ask Aime: How will the new Fidelity Crypto IRA impact the US retirement market?
