Disclaimer – I am not a financial advisor, and nothing in this article should be interpreted as financial advice; it is for educational purposes only.
Retirement accounts are usually conservative with the amount of risk they take. A few years ago, one would have been met with laughter and dismissal for suggesting Bitcoin should be in people’s retirement accounts. It was confined to internet geeks, Wall Street skeptics, and counter-culture crowds in the not so recent past, but on April 26th, 2022, Wall Street’s largest retirement-plan provider, Fidelity, announced it would open up direct investment in bitcoin through people’s portfolios. It has been gaining more mainstream attention and acceptance over the past few years and is on the Verge of a Bitcoin Spot ETF approval by the SEC. In other words, the price of bitcoin is likely about to experience a short-term explosion, due to new laws allowing larger investment in it, and its finite nature (combined with the supply and demand laws of economics) suggests the long-term future is bright.
Fidelity is recommending a maximum of 20% of its clients’ portfolios be allocated to bitcoin. Given that retirement accounts are built to be conservative to ensure the money is there when you need it, the limit seems reasonable. If an employee receives an employer match and allocates the full 20% of their portfolio to bitcoin, this will further boost the price of bitcoin. Employers and employees will team up to bring us one step closer to Satoshi Nakamoto’s bitcoin utopia, and more employers may begin holding bitcoin in their treasury as Tesla does already (over $2B).
This announcement represents a significant adoption of bitcoin into people’s finances and is accelerating growth in the snowball’s size as it transforms into an avalanche. There will never be more than 21 million bitcoin ever mined, so its value cannot be manipulated by hidden agendas but is governed by the laws of supply and demand enforced by the safest encryption known to humanity – blockchain technology. Though different cryptos create value in different ways, often powered through smart contracts, bitcoin will continue to lead the market as it better positions itself to be a core part of our future financial system every day.
For more information, check out the Yahoo News video below:
