US Senators Concerned for Fidelity and Its Bitcoin 401k Plans
Three Senators call out Fidelity Investments in a letter to reconsider its decision to offer Bitcoin Retirement plans. Especially after the FTX collapse. Although there is still fear over the looming recession cycle.
Fidelity, one of the largest asset managers globally, has been a loyal proponent of Bitcoin adoption. Be it in mining or allowing users to add crypto to their retirement portfolio.
As BeInCrypto reported in April, Fidelity Investments, the largest provider of 401k plans in the United States, allowed workers to put Bitcoin in its 401(k) retirement accounts. Senators raised red flags over this decision then and even more so now.
Raising red flags
Democratic Senators Richard J. Durbin, Elizabeth Warren, and Tina Smith raised concerns over Fidelity’s Bitcoin retirement offerings. They added that the industry has become increasingly “volatile, tumultuous, and chaotic.”
In a signed document directed towards Abigail Johnson, the CEO of the investment firm urged ‘Fidelity Investments to reconsider its decision to allow 401(k) plan sponsors to expose participants to Bitcoin.’
“Fidelity Investments has opted to expand beyond traditional finance and delve into the highly unstable and increasingly risky digital asset market.
The message went on to include the recent collapse of the FTX exchange:
“The recent implosion of FTX, a cryptocurrency exchange, has made it abundantly clear the digital asset industry has serious problems. The industry is full of charismatic wunderkinds, opportunistic fraudsters, and self-proclaimed investment advisers promoting financial products with little to no transparency.”
Hence, urged the firm to ‘seriously reconsider its decision to allow plan sponsors to offer Bitcoin exposure to plan participants.’
Johnson had not responded to the letter at the time the press.
Recession claims to rise: Can BTC help?
The World Bank report forecasted an interconnected global downturn that will spill down to the global south. It says a global recession is already in the making as central banks have raised rates at a degree of synchronicity not witnessed in the past 50 years.
Other leaders, too, have voiced similar concerns:
Interestingly, Bitcoin traces its roots to the 2007/08 recession and was born out of the last recessionary cycle in 2009. Founder Satoshi Nakamoto wrote about the bailout of banks in the U.K in the genesis block of Bitcoin 13 years ago.
How Bitcoin reacts to this kind of economic environment is a significant point of interest for investors. There have been long-running claims that Bitcoin would perform very well during times of recession and high inflation.
However, looking at the intense selling pressure, BTC did witness a massive fall. It slumped from its all-time high of $69,000 to currently trading below $16,000.
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