Bitcoin Forum

Another brick in the “institutional money adoption” wall.
American corporates will be able to embed bitcoin in their pension funds for their employees.

US Firm Launches Company-Sponsored Bitcoin Retirement Plans (https://www.coindesk.com/us-firm-launches-company-sponsored-bitcoin-retirement-plans)


I see the this news as a true revolution for at least two reasons:

• this is a sign that bitcoin is now going to be embedded in the product offering by “traditional players”, that decided to cooperate with the enemy before disappearing. Of course this means that the fiscal, legal and compliance framework is almost complete
• sizes can be huge, corporate funds money has been a driving in traditional markets for years
• hodling horizon is in the decades horizon. This money are being sucked into cold storage not to be seen again for LONG time on exchanges.
  
  

I totally agree that this is big news, so maybe as you say revolutionary in terms of the unimaginable adaptation that Bitcoin is making in areas where it was completely impossible just 2-3 years ago. I assumed that the amount in pension funds was significant, so I found data that this amount in the US at the end of 2019 was as much as $18.8 trillion (https://www.oecd.org/pensions/Pension-Funds-in-Figures-2020.pdf).

We can assume that the demand for BTC will be even higher next year, and as you have noticed, everything that is bought for this purpose ends up (specifically in this case) in Gemini cold storage for a long time. I hope some people will have much more enjoyable retirement days with the help of Bitcoin :)

Yes, this will reduce the amount of bitcoins on exchanges and also in part reduce the manipulation power of underground institutions.
The special thing America has a very wonderful financial institution and the majority of rich people are people involved in stocks. Therefore, this is a very potential market for Bitcoin to develop its value.
Another very good news for both the Crypto market and Bitcoin, I think it is not long before the crypto market will pump again like 2017.

If this plan is implemented soon then it will be very good for our Crypto market. The sell-off will gradually decrease and from there, the price of Bitcoin will also move less volatile.
But it just stopped at "plan". As you see, there have been a lot of plans that have been put in place in the Crypto market since the beginning of the year but most of them were rejected. The main problem is controlling money laundering transactions, financial companies have not been able to solve that difficult problem. :'(

So, there's someone cooking  here. It is good to see that there are certain companies in U.S. have that unique retirement plans like this but the thing is only 10% is the maximum allocation in this plan, I actually one of the haters of retirement plans especially the 401k before because my goal is to achieve financial freedom and not just comfortable life like those people who are seeking job security and applying those kind of plan. Disclaimer that there is no bad thing applying in that kind of traditional retirement plans, my mindset is just different from the others. I do not now why I hate pensions and some retirement plans but one thing is sure it is because of the information that I keep reading in different books. This kind of firms are usually hold millions of dollars and the 10% for sure is huge and it can also affect the movement in the market.

It's good news though, it's another hype for mass adoption is the thread all about though it's really advantageous for the Bitcoin space for it depicts the possibility that the American government will adopt bitcoin as well in no time, and if this happens everything will follow the absolute adoption will be attained by bitcoin.

However, with this plan, the demand and transactions will also increase which could make the process much slower and fees will increase though this may only happen in the early stage along the way resolution can be provided and fix the issue.

Ain't against your belief but I don't see any negative concept on retirement plans or pensions since it's us who will benefit from this.

If this were to be limited to just Bitcoin, it would be great news, because it means more institutional influx that will eventually drive global adoption by countries.

The problem is how taxes will be calculated on it? Will it be subject to tax regulations? If so, a large part of it may be deducted as levied taxes on the earned income generated from digital currencies.

Is it possible to invest in more than one cryptocurrency?

I don't know about that--if enough people participate in a retirement plan like this, then the amount of bitcoin being held on exchanges might be reduced, but people do cash out their plans early as well and there are a bunch of other variables I could probably think of that might make for an argument as to why the effect wouldn't be as significant as you'd think.

Anyway, this will probably be a hit with millenials and subsequent generations, but I don't think it's going to be very popular with individuals in their 40s and up.  And anyone who would put a significant amount of their retirement savings into crypto had better be young and well-paid, because this is super risky.  Personally I wouldn't participate in a plan like this, but that's just me.

I'm assuming whoever is running the fund will take care of the accounting, same as traditional retirement plans.

Bitcoin into retirement plan is really a big step forward in the adoption of bitcoin. This helps with people know better about bitcoin. Now the people will try to learn about bitcoin as employees were given the choice on their retirement plan. As mentioned corporate funds were very huge and this money flow into the cryptomarket will make big change in the market.

As it is company sponsored retirement plan governments doesn't have any control over it. This also adds more value for the retirement plan, but the market volatility will be much considered from consumer point of view.

i have the same take on this. those individuals maybe 50s and up (i consider 40s now be included in the younger gen, lol), will have hesitations on taking a big risk with this type of plan. but you know, company staffs that are in charge on this dept are really good talker, so maybe they can still convince those older gen to put some percentage of their retirement plans to crypto.
 and i dont think the btc that will go to this will be significant to influence the market.
maybe we will be seeing the effect few years from now (when other big institutions will join this type of arrangement), but right now, dont think it will really have considerable impact in btc market.

and in terms of taxation purposes, this article briefly discussed how your crypto is being taxed

https://www.thesimpledollar.com/investing/cryptocurrency-and-taxes-a-starter-guide/

https://i.imgur.com/EUegQUo.png

I personally find irrational not to have some exposure to bitcoin. It's all about volatility (yes, volatility can be a positive feature too) and expected yield.
Bitcoin has the potential, being an asymmetrical bet, to tilt investment portfolios to better than expected results (on a risk/reward perspective) than any other portfolios choice.
So think everyone should be invested, even for 1%, into Bitcoin. Please note that they should add bitcoin to their portfolios not even if they are scared, but just because they are scared!

"If you don't eat yer meat, you can't have any pudding
How can you have any pudding if you don't eat yer meat?"

Frankly, it feels like this news is removing a brick from the wall, no?

Either way, it's exciting news!

This news also hit a 401k Specialists News Website HERE (https://401kspecialistmag.com/daim-launches-first-erisa-compliant-bitcoin-401k-plan/), which is cool...it's news for them, not just us.

The next question is - what's their plan to solicit major retirement plan providers to have their BTC fund added as an investment option? Once that happens the door that connects retirement assets with the cryptocurrency community will truly be open. I also like that they're capping the investment at 10% of a 401k holder's account assets. We don't need people losing money on the occasional downward slide and then blaming bitcoin publicly for their foolish investment diversification behavior.

The upside potential for bitcoin is huge, but if real money starts going into bitcoin and away from the financial markets you'll see the financial markets slide. We may be in for a really significant reset of the financial market valuations, while the economic activity stays the same...very very interesting horizon in front of us. Who needs popcorn?

Just think how much of the financial markets is based on some form on Store of Value. When bitcoin will be the best possible form of store of value, all other subpar forms will be inevitably stripped off their "financial" value, reverting to industrial usage. This will happen for stocks and bonds, but also for gold, real estete and land.

And that's a big if. This company is virtually unheard of. I can't see mid-size and large companies working with them anytime soon. They're best bet is attracting a small niche of Bitcoin-minded small business owners who really want to offer this.

It'll be huge when Vanguard or Oppenheimer starts offering BTC funds accessible via retirement plans. I wonder how far off that is.

There is no cold storage for bitcoin, even though they do store it, the amount will circulate just like fiat stored in banks. I think this is not a good thing because we all know this retirement plans will be return a very low yet competitive interest, most of the profit from the growth of the stored bitcoin will come straight to the pockets of the institution big wigs, the best thing that they should do is offer a bitcoin oriented index funds which considerably grows bigger than returement funds.

Bitcoin as a retirement plan is a big thing, for sure they believed in the future of bitcoin and this news is a big thing in this market. If those companies believes on Bitcoin then we should also show our support to this market, we might see another peak this year and people will be more happy especially those who are trapped since the last bull market, Bicoin will become more big in the future and I'm also considering Bitcoin as my retirement fund.

Immediately I read your first paragraph, the first thing that came to my mind - ‘damn, another HODL that’s going to be taking money away from the market and keeping them away from circulating for a very long time.

Anyway, it’s good how a lot of institutions are starting to recognize Bitcoin, but the way they are buying up huge amounts, lol, are we really still going to have enough to be using for transactions? Because it’s not really everyone that’s here to Hodl, there are still people whose main focus is on making use of cryptocurrency, especially Bitcoin, for transactions.

I doubt that they view Bitcoin as a threat, who exactly it can replace? Banks? Investment funds? Payment networks? No way.

But if regulation and government recognition is coming, most importantly by the US and EU, if they will make it clear that they won't suddenly decide to crack down on Bitcoin, this will indeed be huge. All the institutional investors who so far were worried that Bitcoin can suddenly get banned will have one less reason to not invest.

You mean like an investment plan, like donation or contribution like it is done in fiat for monthly distribution or stipulated time? Just wanting to know your idea to the suggestion you made.

I think giving pension funds with bitcoin digital currency can provide a lot of profit when the price of bitcoin is rising like this, but when the price of bitcoin collapses it will definitely make a lot of people lose. distributing for each month in bitcoin is a very good thing but it also has a downside.

Of course Bitcoin is not against commercial banking: bitcoin is against Central Banking.
This doesn't mean that banks can view bitcoin as a threat. In essence the bitcoin motto "be your own bank" allows bitcoiners to directly and independently access a wide series of services that now require a commercial bank (think of payment processing, or international money transfers etc).
In this sense bitcoin is a threat to commercial banking, directly, and not only as an emanation of Central Banks. Can bitcoin replace commercial banks? Why not, in the long run, the DeFi can replace the Centralised Finance.



Yes, this is a paradigm shift we are looking at. That could be huge.

Why would I want to work with someone else on my crypto retirement plan? What would be the advantage to give another company fees to do something that is basically fully free? I can just buy bitcoin right now if I want to and they do buy bitcoin for me as well, what is the difference for what they bring to the table? Is it just not having to deal with buying bitcoin? Because that would be easier to handle than starting a retirement plan at a company.

So, I would say this is an idea that is deadborn and would never pick up. Only people who could maybe get this would be already too old and retirement wouldn't really be something they are worried about and already handled. Companies should just let people buy bitcoin directly instead of working with them.

That is the deal here isn't it. We are hearing bitcoin related stuff from big players who were not related to bitcoin and it is growing at a rapid speed.

First it was small places that bought 50 million dollars worth of bitcoin, then microstrategy then grayscale then paypal opened up to bitcoin and now we have this which is obviously smaller but still something.

Soon we will hear that all the big banks and brokers in wall street will help their customers get crypto if they wish to, instead of just offering stocks.

Hence we are not going to just be coinbase, binance, circle type of thing, we are going to be basically trillions of dollars go through crypto type of thing one day, maybe not soon but we are going towards that type of situation very soon.

I think the reasoning here is the same with traditional pension funds: why would you let your employer manage you pension funds for you? You would be more than able to manage yourself. But still, your employer do so on your behalf. Surely it is more costly, but also this force you to save, and lack of saving could have negative consequences in the future, and probably your employer has some sort of fiscal advantage doing so.

Probably these are the same exact reasons why there will be a bitcoin fund.
You may agree or disagree with those reasons, but the point is that the case for an employer-sponsored bitcoin pension fund.

While I welcome the institutional adoption and acceptance of Bitcoin, I would still argue that holding Bitcoins on your own is much safer than trusting any of these institutions. Unlike the case with stocks and mutual funds, you don't need external assistance if you want to store Bitcoins. All you need is a smartphone and an internet connection. So why can't we plan our own retirement plan with Bitcoin?

Let me reiterate what Filliponne said in the reply right above yours. You're right about Bitcoin being designed to give autonomy to the holder and you shouldn't have or need a third party service to serve as an intermediary. However, holding bitcoins and drawing up a retirement plan are two separate activities. One can easily create a savings account and deposit fiats in at intervals, but still chooses to register for a pension plan, same also applies if the held asset is bitcoins. I wouldn't recommend anyone to be completely responsible for their retirement plan as they cannot be completely accountable for the little details (such as passage to next of kin, or percentage being saved) or guarantee that they would actually meet up with the set requirements. A professional plan offers such "guarantee".
I am not recommending any Bitcoin pension fund, but if you must plan your retirement with Bitcoin, much better to use a reputable service.

Not sure if it would function exactly as a 401(k), but according to an excerpt from this article (https://www.investopedia.com/ask/answers/100314/whats-difference-between-401k-and-pension-plan.asp), interests on investments are not taxed;

If you are on this forum I do hope you are already working on your personal bitcoin retirement fund. The news signals that the average Joe working as a slave will have the opportunity to get some sort of btc exposure in the form of a retirement plan where his masters will drink up nice and juicy commissions.
So, the news it's not for us but of course will be good for us because this means fewer coins around, and if there are fewer coins around ours will go up in price. Easy.

I will be the most skeptical person in this thread and ask. What will happen if by the time of my retirement, BTC, for example, does not die, but its price will be much lower simply because it will be replaced by another coin that will be better in everything and it will pass the legendary "to the moon"? I'm sorry, but as much as I would like BTC and cryptocurrency in general , I am not ready to trust them with my long-term savings like a pension. This is worse than trading credit money with leverage, don't you think?

The biggest incentive to do it is the employer contribution match. The last time I worked a salaried job, fully vested employees were getting a 5% match from the company. This is commonplace. You can't contribute to your own private plan (separate from the company) and also get the employer match. You have to use the employer-provided plan.

Imagine getting 5% extra salary, untaxed, to put into BTC. 8)

Hey darewaller, i really appreciate your comments here...


However...with respect...you're drastically overestimating how many people know about and understand bitcoin.

How young are you? I meant that as a compliment, i promise? Are you 20 years old? Younger? A vast majority of people that have retirement plans have maybe heard the world "bitcoin" and really have zero idea of what it is, how it works, or how to access it.

This same majority of people have $3.8 Trillion US Dollars in 401k plans.  (https://www.google.com/search?q=how+much+money+is+in+401k+plans&oq=how+much+money+is+in+401k+plans&aqs=chrome..69i57j0i10i22i30.6197j1j7&sourceid=chrome&ie=UTF-8)

These people just send money to an account and likely need help figuring out which mutual funds to buy - err big companies, small companies, domestic companies, international companies. They have no clue how bitcoin works and they don't have any interest in learning.

So yeah, you're right in that it's a bit foolish for those that know about bitcoin to access it through a middle-man firm that administers a 401k plan, but we should also be thrilled that these companies are going to offer bitcoin to a portion of the nearly $4 Trillion US Dollars sitting in these accounts.

If we captured just 5% of those assets as net new bitcoin buys we'd be looking at $190 BILLION dollars buying bitcoin.

Let that sink in. How close would that get us to the moon?

It is a risk which most of the people would be willing to take. No one is saying here that 100% of your retirement funds needs to be in Bitcoin. It can be 5%, 10% or even 2%. I don't know what will happen to Bitcoin after two or three decades. As you said, there is always a chance of some other technology replacing it. But there is also a strong chance that it's price will go up by 10x or 25x.

Such a good news. It means the whole crypto market has opened to yet another potential cash flow to grow the market capitalization. If even the US Firm launches bitcoin retirement plans. I'm very sure the other countries will also follow. It's just matter of time until crypto market gets overflowed with these adoptions which therefore makes crypto even more prominent and legitimate which I'm really glad about if that's to happen.

I am not going to lie, they could do this for people who do not understand bitcoin very well, for people who heard about bitcoin on the news and how it is breaking records after records and how it has improved more than any other thing this year etc etc, those people who can't buy bitcoin all by themselves or at least feel a bit scared about it.

But for people like me, who already have a retirement plan that includes bitcoin, they are worthless and what they are doing is useless as well. What these type of companies bring as risk is the fact that when they get in, if they are big enough they are a good advantage for us but when they get out it is remarkably worse. For example paypal came out recently and that surely effected well but with all the bad news coming out of them banning people, it sounds like they are also effecting it worse as well.

It’s an asymmetrical bet, of course.
If you put 1% of bitcoin in your retirement plan, and bitcoin appreciates 100X in the next 20 years ( something not  outside the real of possibilities) you are losing the possibility to edge a good portion of the real purchasing power (I.e. measured in things your capital can buy, not in dollars) not to lose 1% of that cap it al in case bitcoin goes to zero.
It makes perfectly financial sense to have at least a few percentage point of your total wealth in BTC, even if you actually do not believe in BTC! (Roger Ver still owns a lot of Bitcoins, for example).


This. I do agree, this is the difference between a firm-sponsored retirement fund and a private dollar cost averaging fund.

Let's be honest - if a person wants to use such a pension plan, they know in principle what BTC is and how it works and understand the risks.
An ordinary person who has invested in life only in the treatment of their teeth and saw shares as a corporate bonus for years of service will not want to get involved with such things in principle, because at the level of intuition, let's be honest again, BTC looks like not a stable investment.
And very long and tedious will have to explain to him what it really is and all the prospects. It seems to me that this is too niche a product and there is a suspicion that this is not only a very local story but also a very likely fraud.

Your last point is probably the most important. The difference between retirement funds and JPMorgan/Paypal adopting is that they are not in the business of speculating (or at least as much as financial service intermediaries). They generally are much more passive and their investment horizons are indeed much, much longer.

Resultantly, what we will see is likely a very large gap between institutional demand for BTC and new supply from minted coins, especially after this halving.

But whether or not more retirement funds in other countries start offering this will largely depend on the regulatory decisions made by international counterparts of the SEC. I think that diversifying into BTC is a must-do considering its inflation-proofing properties as it is entirely decoupled from the fiat regime, but obviously regulators seem to have an issue and think that this is inprudent.

Obviously when you do it this professionally it is going to be different but it is going to cost more as well. This is a lot more decent method and there is a very low chance that your bitcoin could be stolen, here you are investing money into a company actually and not yourself, because if the company bankrupts all of your money will be gone as well so you are helping this company stay afloat by being their customer meaning you are investing into their future and your future together.

However there is a bigger chance any crypto exchange you keep your coins could be hacked or crash or something and your money could be fully gone whereas a company that is audited and insured would probably not have any of these problems at all, it would probably be much better.

This is essentially a very good thing , but at the same time I do believe that the company does have to take into account the Volatility of the Bitcoins for sure and double insure it in any case since no matter what Retirement plans are really very serious and therefore even a little irresponsibility on the part of the company can cause problems for the investors.

- they would need to employee people who are very familiar not in just theory but in practical part too with Bitcoins and other cryptocurrencies.

- they have to make sure that the people who are investing here understands how It works.

This is really positive news for Bitcoins and at the end of the day I do believe that the the company will have to imply a whole different approach when it comes to this and make sure they are up to date with everything alike. Let's see how it goes.

The idea that people may want to keep holding bitcoin for decades is a very new thing and would basically be maiden voyage for whoever gets involved.

Right now, bitcoin is 10 years old and that means there hasn't been too many people who have retired because of age during that period. Sure there might be some few people who were 60 years old and now 70 and may have retired or whatever but it is not the majority, in fact it is probably a very very very tiny insignificant amount.

Whereas I think in 30-40 years time there will be plenty of people who will retire thanks to being in bitcoin.

There could be some people who made millions of dollars in profit thanks to getting in early and getting out at high prices but those are not regarding age so I doubt they count in this.

Traditionally retirement plans have been built around the most stable assets possible - eventually crystallizing into bonds which are very unlikely to lose value. While a 10% bitcoin allocation could be acceptable, I'm not sure I'd ever trust my future to bitcoin because it does return money to you like a fixed income asset or a company that is distributing dividends from profits each year. I guess it could be considered similar to allocating some money to gold, but that doesn't seem like much of a plan either.

I had thought that we wouldn't see development such as this just yet with bitcoin. Using bitcoin as retirement plans isn't something I thought could happen in two or three years to come just because of its volatility. I have my reservations because the concept of crypto-backed retirement plans can only be made possible by stable coins such as USDT and we all know bitcoin is far from being stable.
This, happening now, shows how fast bitcoin is moving towards mass adoption. I wouldn't be surprised if, at this rate, bitcoin becomes a worldwide currency in just two to three years.

I'm not so sure if this is a great idea at all. A bitcoin insurance is a much better idea than knowing that your retirement money is based off a currency that is too volatile to even be used as a money, and intangible that we can pretty much say they are made out of thin air. Imagine the pressure and mental damsge that could do to a weak-hearted future you. It's just going to be too much.

People can choose how much they want to put their money into bitcoin up to 10%, for those who doubt about bitcoin can set just 1-5% for their retirement but even 10% is not too much and will be a great deal in the long term as Bitcoin value keep increasing as time goes on. I prefer to hold bitcoin on my own because it's safer and be able to manage it as I want but diversification is a good thing, especially for the long term. In any case if I make a bad decision that leads to losing my bitcoin, the retirement account will be the backup plan.

I do not know how it will work but it semms that they are pretty sure that bitcoin will not going to collapse and that it can sustain even in the long period of time. I think it is a little bit complicated but of course we can finds ways. Anyway, bitcoin is good as a reserve money or an asset so as a part of retirement plans then it is better compared to the traditiona retirement plans. We know bitcoins keep growing over a period of time and that benefits can get double or even trippled over a period of time.

A pension plan with bitcoin is really impressive for various reasons. From a post noticed the volume of pension fund for the year to be around $19 trillion. If the same or the fund partially gets through bitcoin, it contributes big in terms of market circulation. This is how the real-time usage is enriched. Today there is also news on positive comment on cryptocurrency regulation from Banking regulator of US. These will add value to the cryptocurrency market and encourage more usage.

ROFL. Most of the retirees would devote anywhere from 50% to 75% of their portfolio to non-volatile assets such as US treasury savings bonds. But the problem is that their returns are very low and the future outlook also says that the returns will decline even more in the next few years. So obviously they need to devote the remainder of their portfolio to those assets which can give better returns. Stocks and bullion are good options, but small amounts of cryptocurrency would act like icing on the cake.

This is actually a big step for Pension funds, because most Pension funds only invest their members funds in very stable and safe investments and we know the Bitcoin price is very volatile and also a high risk investment.

That said, most Financial advisors will tell you that you should have a very balanced portfolio... with a mixture of low and medium and high risk investments. A typical Pension fund has the majority of their portfolio invested in low risk investments. I am glad to see that more trustees and fund administrators are opening their investment portfolio to get a taste for a bit more high risk investments like Crypto currencies. (High risk can yield some very high profits too)  ;)

Thank you, OP.... it is a good sign for the future.  ;)

I agree with you, Pension funds are usually the slowest investors compared to general investment funds and  hedge funds. Due to the long time span of retirement funds it's usually much more risk averse than other investors. So to these kind of companies going into bitcoins now is a great achievement for the community. Also there is lot of money behind pension funds which would mean higher prices in the future.

401K is already something people can't really get enough from, it is already something they will try to cash in as quickly as they possibly could, legally speaking of course. To add something as volatile as bitcoin, on a case where bitcoin drops that period, they will want to get out and react very badly and when you are aiming for retirement and get out very quickly due to few bad moves, you are going to be very upset about your future.

Think about it, 2008 and 2009 were one of the highest years when 401k cash out was real, why? You think just because people needed money? No. It was also because mainly people lost hope and got out to protect further loss. Further loss fear always trumps over the excitement of future profit potential and that is not really ideal in bitcoin world that always moves crazily.

Great news, but I think so far few people want to take advantage of this opportunity, especially the older generation. In the future, such innovations will certainly make themselves felt in the form of an increase in the value of bitcoin, since the new generation is growing up and for them bitcoin will no longer be something unknown and incomprehensible. Sooner or later, bitcoin will be introduced into many aspects of our daily life.

Pension funds are not something that people want to see volatility, they want to know that they will make a small but sure amount of profit over course of many decades in order to leave something for their old times and basically not be poor while dying at old age, and if they can die very cheaply, they could leave something to their kids.

This is why they do invest into things like index funds and all, vanguards, many other things like that to make like 3-5% guaranteed money without any possibility of losing except few rare crashes that causes bankruptcy, otherwise they are usually much better.

Putting crypto in that logic would be silly, I mean it is as volatile as it gets, and I can't think of anything worse for a pension fund to invest since it would be totally against the idea.