Through a publication it was known that Coinbase reached an agreement with the provider of 401 (K) ForUsAll they have come together to provide certain companies the opportunity to include investing in cryptocurrencies as part of their retirement plan.
After Coinbase struck this deal, the platform, called Alt 401 (K), will allow workers at participating companies to transfer up to 5% of their account balances to a cryptocurrency window traded on Coinbase. They will have more than 50 cryptocurrencies to choose from as investment vehicles. ForUsAll says it also plans to monitor allocations, alerting employees when their overall cryptocurrency allocation exceeds 5% of their portfolio.
Beyond cryptocurrencies, Alt 401 (K) will also invest in mutual funds, environmental, social, government, real estate, and other financial vehicles in the future.
First 401 (K) plan that includes cryptocurrencies
ForUsAll says this is the first 401 (K) plan to include cryptocurrencies. The firm did not disclose how many of its clients have signed up for the offer.
Like any asset purchased on a 401 (K), any cryptocurrency purchases and earnings are tax-deferred until you withdraw money from the account. The company also offers a Roth option that could be tax-free when you make a withdrawal.
“The reality is that alternative asset classes, which include increasingly small allocations to cryptocurrencies, have become an important part of many institutional portfolios,” said David Ramírez, co-founder and chief investment officer of ForUsAll in a statement.
“Without access to these basic components of the portfolio and without the help of experts to use these asset classes wisely, the average American can find himself at a structural disadvantage.”
ForUsAll manages an account of 70,000 employees
ForUsAll is a fairly small player in the 401 (K) field, with $ 1.7 billion in retirement assets. Founded in 2021, it currently manages the accounts of 70,000 employees.
“Technologies like blockchain and cryptocurrencies have the potential to transform our economy,” said Ramírez. «The combination of access to these assets with education. And portfolio monitoring can allow more Americans to benefit from these emerging technologies.
Founded in 2012, San Francisco-based ForUsAll manages $ 1.7 billion in retirement fund assets for 70,000 employees, a small portion of the $ 21.8 billion in defined contribution retirement assets (i.e. 401-Ks and IRA) in the United States, by the end of 2020.
ForUsAll Chief Investment Officer David Ramirez says more than 60% of the provider’s 400 employer clients over the past three months have expressed interest in the plans. The move also represents a new source of customers for Coinbase, which went public in April 2021 and is now valued at $ 46.29 billion.
Investment opportunities presented by the original cryptocurrency Bitcoin are becoming popular through products such as Bitcoin IRAs offered by companies such as CoinIRA or Bitcoin IRA. Even larger companies have started offering BTC as investment opportunities, albeit in a less direct way.