Fidelity Investments has opened its retirement services to those who love crypto. Fans of digital currencies like bitcoin and Ethereum can now purchase these assets and many others like them through their Fidelity-based 401Ks and retirement funds.
Fidelity Is Stirring Concerns Amongst US Lawmakers
Naturally, the move leads to many questions, a main one being, “How big will the crypto space become from here on out?” The maneuver is likely to lead to new levels of legitimacy and mainstream appeal, though there are several politicians and industry leaders out there who are rather concerned that Fidelity could take such a big step towards saying, “Go ahead and spend the money you’ll likely use in your old age and plunk it into volatile assets.”
Among the doubters and haters out there is Elizabeth Warren, a democrat senator from Massachusetts. Warren, in many ways, has always been there to jab a stick into the side of crypto, especially when it seems to be doing well. In recent news, she called for many crypto exchanges to fully cut off their services to Russia given that the country had invaded Ukraine, though many individual residents in Russia have nothing to do with the incident.
Warren is worried that Fidelity is not thinking hard enough about the implications of crypto. She says that the space is too risky, and that Fidelity needs to turn back and consider how it plans to protect people from making wrong or hazardous financial decisions before opening Pandora’s money box.
Not long ago, she and fellow lawmaker Tina Smith – a democrat of Minnesota – penned a letter to Fidelity asking how the monetary organization will manage “conflicts of interest” with its own crypto mining operation and how it plans to keep risks under control. The letter states:
Bitcoin’s volatility is compounded by its susceptibility to the whims of just a handful of influencers. Elon Musk’s tweets alone have led to bitcoin value fluctuations as high as eight percent. The high concentration of bitcoin ownership and mining exacerbates these volatility risks. One study estimates that just ten percent of bitcoin miners are responsible for processing 90 percent of bitcoin transactions and that 1,000 individuals control three million bitcoins, about 15 percent of the current bitcoin supply. In short, investing in cryptocurrencies is a risky and speculative gamble, and we are concerned that Fidelity would take these risks with millions of Americans’ retirement savings.
Trying to Stop Russia
In the past, Warren has made her harsh stance on crypto rather clear. Not long ago, “Pocahontas” drafted a new bill that would see all crypto exchanges defying sanctions set in place by the U.S. or its allies financially penalized.
The document was written to ensure no crypto exchange does business with Russia or its many sanctioned oligarchs.