USA opens the ban on pension plans with Bitcoin, what could go wrong?

Last week the investment firm Fidelity announced that it will allow individuals to invest part of their pension funds (called in the US 401(k)) in Bitcoin. The idea is that throughout the year it will be available to all employers that provide pension plans through Fidelity to their employees.

401(k) plans are similar to employment pension plans in Spain. Workers can divert part of their salary before taxes to these plans, but within them they can choose a large number of products, such as stocks, bonds, funds… and now also Bitcoin. It is a good idea?

Bitcoin is excessively volatile

It seems that society is on the way to accepting that Bitcoin is a safe haven asset. Although some of us are not so clear about it, the truth is that large investors are beginning to take it seriously. But it’s still a very volatile asset and that basically has no support behind it.

In other words, investing part of the pension plan in Bitcoin is choosing something that is very volatile, with little history and that deflates, it does not have a real backing, something accurate such as companies do have (customers, cash flow, infrastructure) .

Although it is true that investments in pension plans are long-term and perhaps this is more convenient than actual speculation, it is also true that the certainty that products such as long-term shares always rise does not you have with Bitcoin.

Although volatility is not synonymous with riskthere is not enough data to know if Bitcoin, removing volatility and focusing on a long time horizon, will be a good investment.

Uncertainty? Better not risk retirement savings

In a clear scenario of uncertainty, it is not very positive to invest retirement savings. I do not see anything wrong with dedicating a part of the money that you are not afraid of losing in Bitcoin, but not investments for retirement.

Despite what crypto fans say, investing in Bitcoin to hedge against market crashes is not the best idea

In addition, this movement by Fidelity can spur individuals who would not have invested in Bitcoin to do so, since it is backed by its stable 401(k) that also brings tax advantages. If the whole Bitcoin thing were a bubble (I’m not saying it is, it’s just a possibility) such a move would attract more investors and lengthen the bull cycle before the crash. Therefore more fuel for the fire.

Honestly, a bad move for Fidelity, but sure to bring you big profits. Yes indeed, earnings will be in hard and cold dollars.

Source: El Blog Salmón by

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