A group of US senators address a letter to Abigail Johnson, CEO of investment firm Fidelity, regarding her Bitcoin retirement plans. The document was signed by Senators Elizabeth Warren, Richard Durbin and Tina Smith.
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The investment firm launched its Bitcoin-based 401(k) plans in May 2022. This provides US citizens with the opportunity to gain exposure to cryptocurrency with this popular vehicle for long-term investing.
In the documents, government officials ask Fidelity to disclose “why” it offers a Bitcoin retirement plan. The senators believe that this offer is “misguided for one of the biggest names in the world of finance”.
In this sense, they claimed that Bitcoin is a “volatile, illiquid and speculative asset” unable to provide its users with “regular returns over time”, the document states. Investment vehicles for retirement in the country are already part of a “precarious system”.
Investing in bitcoin, the senators said, could worsen retirement conditions for US citizens. Government officials pointed to the volatile and “untested” nature of BTC in global markets.
The Bitcoin network was launched in 2009 by Satoshi Nakamoto, the underlying asset (BTC) that has allowed millions to trade trillions in total volume over a decade of existence. During this time, cryptocurrency has been appreciated many times over.
Despite these facts, US senators said the following to Fidelity’s CEO:
While we appreciate Fidelity’s efforts to help American workers enjoy a more secure retirement, this decision is extremely troubling. Perhaps most troubling is that by highlighting the risks of investing in Bitcoin on its website and planning to limit plan participants’ exposure to 20%, Fidelity is acknowledging that it is well aware of the dangers associated with investing in Bitcoin (…).
US senators compared Bitcoin to gambling in a casino
The senators tried to argue that Bitcoin and cryptocurrencies have been a bad investment. The price of BTC lost more than 50% of its value during this period, reaching around $69,000, and highlighted that blockchain technology is more “promising”.
This is the usual argument used by BTC detractors. As a bitcoinist reportedthis is not the first time that these American senators have made demands.
When Fidelity announced its product, Elizabeth Warren and company asked about their Bitcoin-based retirement plan. At that time, US senators said Fidelity was ignoring a warning issued by the US Department of Labor about investing in crypto.
Despite these seemingly attempts to dissuade the investment firm from offering its BTC product, Fidelity persisted. The US senators concluded their second letter to Fidelity by calling out the BTC investment with the following:
This asset class is heavy, extremely complex, unregulated and highly volatile. Working family retirement accounts are no place to experiment with unregulated asset classes that have yet to demonstrate their value over time.