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US firm Digital Asset Investment Management (Daim) has announced the launch of a company-sponsored 401 (k) pension plan that allocates up to 10% in bitcoin. The plan is an ERISA-compliant employer-sponsored 401 (k) and assets are stored in institutional-grade cold storage leveraging custodian Gemini Trust.
In recent years, investors have been able to leverage a digital currency retirement plan in the form of an IRA. For example, the Bitcoinira company helps people invest in cryptocurrencies like BTC, BCH, ETH, and LTC with the company’s cryptocurrency-focused pension funds. On Thursday, November 19, 2020, Newport Beach, California-based Digital Asset Investment Management (Daim) company revealed an ERISA-compliant employer-sponsored 401 (k) bitcoin plan that includes an allocation of BTC.
“Since we were approved by the State of California in June 2018, we have seen an incredible inbound demand from individuals eager to invest bitcoin in 401 (k) s,” said Adam Pokornicky, COO of Daim during the launch. “Conventional 401 (k) plans are restrictive and often lack investment options, causing not only the frustration of participants, but also poor risk-adjusted returns who can barely keep up with the inflation rate.”
“This is a bad deal for savers given the current environment. We believe bitcoin has proven to have a place in the modern wallet and that people should have the opportunity to “Get Off Zero” and invest directly through their retirement account, “added the Daim executive.
According to Daim, the company will be the 3 (38) advisor and trustee and will assist companies that want to offer 401 (k). The plans have traditional assets along with an allocation of up to 10% in bitcoin (BTC). “Bitcoin will be securely stored in institutional cold storage at Gemini Trust, our partner for our primary investment advisory services. The Californian firm also explains what happens when an employee leaves a company offering the 401 bitcoin plan ( k).
Daim states:
If the employee leaves their company, their Bitcoin can be transferred with them. And if an individual wishes to allocate more to Bitcoin, they can schedule an investment consultation with Daim.
Pokornicky also notes that Daim ran an employer-sponsored 401 (k) plan in October 2019 and has been testing it for 12 months. Daim is now authorized to launch “scalable 401 (k) plans providing administrative and registration services”. “[Daim is] excited to lend our fiduciary capability to allow access to Bitcoin in 401 (k) plans in this way, ”shared Pokornicky.
Other companies offering bitcoin-related retirement services besides Daim and Bitcoinira include Bitira, Coinira, and Regal Assets. As the digital asset ecosystem continues to grow, concepts such as retirement services have tapped into the growing crypto economy.
401 (k) plans offer tax benefits to employees, and the US Internal Revenue Code allows 401 (k) or IRAs. With digital currency prices seeing huge gains in recent days, a bitcoin-based 401 (k) could prove to have a much greater retirement yield.
What do you think of Daim’s launch of an ERISA-compliant employer-sponsored 401 (k) with a 10% bitcoin allocation? Let us know what you think about this topic in the comments section below.
Image credits: Shutterstock, Pixabay, Wiki Commons, daim.io/bitcoin401k,
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