Bitcoin goes mainstream

Bitcoin is opening up to the masses: established German banks want to get involved in the crypto business and store the currencies, Bitcoin ATMs are being installed and now, for the first time, pension fund customers in the USA can save for their retirement with Bitcoin. BTC has arrived in the mainstream.

In addition, more and more countries are introducing Bitcoin as an official means of payment – most recently the Central African Republic, which is following El Slavador and legalising Bitcoin. The corresponding bill regulating the use of cryptocurrency was unanimously approved by parliament last week. With this, BTC replaces the Central African Franc (CFA Franc) as the official currency.

Bitcoin for retirement planning

Fidelity in the USA is going one step further: for the first time, customers of this pension fund can save for their retirement with Bitcoin. To mitigate the risk, only part of the retirement savings can be invested in BTC. Nevertheless, the employees of around 23,000 US employers will now be able to buy Bitcoin through Fidelity from the middle of the year and save for their retirement with the coins in their securities account.

Fidelity estimates that the Bitcoin blockchain will play an important role in the financial world in the future and wants its pension savers to participate in this. Although the US government recently warned pension fund providers against using cryptocurrencies as part of their retirement savings, the opportunities seem to outweigh the risks.

Prominent role model

The Norwegian sovereign wealth fund is the largest pension fund in the world – and also invests in Bitcoin. It does so indirectly – in the form of shares in Tesla and the software giant MicroStrategy – but one has to bear in mind that both companies hold a considerable part of their corporate assets in BTC.

Of course, compared to other asset classes, cryptocurrencies are still volatile – Bitcoin is no exception, as can be seen from its all-time high in November 2021 until now. Nevertheless, the risk is worth it if you have the forecasts of leading analysts in mind – the 100k mark will be cracked – the only question is when. Against this backdrop, a pension fund, with its long-term investment horizon, may be just the investor to make the most of the volatility.

Still, Fidelity builds in a few safeguards: The number of buys and sells is to be limited and the prices in the portfolio are to be updated only once a day. This should put a stop to unrestrained speculation.

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