401(k) Provider’s New Option Highlights Crypto Risks

thebalancemoney.com:

Employees of some companies will soon have a new option in their retirement accounts: crypto. But government regulators remain cautious about Bitcoin and other digital currencies and warn that the volatile assets are speculative.

ForUsAll, a 401(k) provider that administers retirement accounts for about 400 employers, said this week it’s launching a platform called Alt401(k) that will allow participants to put their money in alternative investments, including cryptocurrencies, in addition to the more traditional options like mutual funds and exchange-traded funds (ETFs).

Starting in July, employees of companies that sign up for the platform will be able to transfer up to 5% of their balances into a secure account where they will be able to buy, hold, and sell more than 50 different cryptocurrencies. Participants will also be able to allocate 5% of future contributions to the account. Cryptocurrency exchange operator Coinbase will manage the trading and custody of the digital coins.

The new 401(k) offering highlights the diverging views of cryptocurrencies held by the general public on the one hand and by government regulators on the other. Acceptance of cryptocurrencies is becoming more mainstream each day, with corporate giants like Visa and PayPal allowing users to make purchases with crypto, and mobile payment service Venmo now offering users the option of trading the digital coins on its app. Even some Wall Street firms and financial advisors have warmed up to the idea of crypto assets as an investment option, primarily because their clients are clamoring for them.

But regulators and politicians have been less enthusiastic. The Securities and Exchange Commission (SEC) has called the Bitcoin futures market “highly