US Firm Launches Company-Sponsored Bitcoin Retirement Plans

[fillippone]

• 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

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

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.

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.

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

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[darewaller]

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.

[tygeade]

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.

[fillippone]

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.

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.

[Vishnu.Reang]

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?

[Upgrade00]

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.

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.

Not sure if it would function exactly as a 401(k), but according to an excerpt from this article, interests on investments are not taxed;

Any investment growth in a 401(k) occurs tax-free, and there is no cap on the growth of an individual account. But unlike pensions, 401(k)s, place the investment and longevity risk on individual employees, requiring them to choose their own investments with no guaranteed minimum or maximum benefits. Employees assume the risk of both not investing well and outliving their savings.

[Karartma1]

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?

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.

[bits4books]

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?

[exstasie]

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.

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.

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.

[HabBear]

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

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.

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.

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?

[Sithara007]

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?

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.

[poodle63]

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.

[FanEagle]

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.

[fillippone]

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?

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).

<...>
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.

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

[bits4books]

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?

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).

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.

[magneto]

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

DAiM will serve as an adviser and fiduciary while helping companies create a 401(k) plan that allows a maximum allocation of up to 10% in bitcoin (BTC, +0.95%) alongside varying degrees of exposure to traditional assets, according to an announcement Thursday.

Cryptocurrency associated with the Employee Retirement Income Security Act (ERISA)-compliant plans will be held in New York-regulated Gemini Trust’s cold storage custody.

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.
  
  

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.

[fullhdpixel]

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.

[fiulpro]

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.

[davinchi]

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.

[Fortify]

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.