Coinbase Partners with Retirement Investment Provider to Bring Crypto to 401(k)

ForUsAll, a retirement investment platform for small businesses, today announced the introduction of the Alt 401(k), which will allow employers to provide alternative investment options within 401(k) plans starting in July. It is the first of its kind. 

“Over the last five to 10 years, there has been a fundamental shift in how institutional investors are managing their money,” said David Ramirez, co-founder of ForUsAll. “A growing number of institutions, including foundations and increasingly pension plans, are allocating material portions of their portfolio to alternative investments, including cryptocurrency, but the average 401k investor, which is the main savings vehicle for Americans, does not  have access.”

ForUsAll will be using Coinbase Institutional for custody and exchange for the digital assets. The Alt 401(k) will allow for both traditional and alternative investments. Employees will be able to transfer up to 5% of their balances into a secure account that has exposure to certain cryptocurrencies. There will be over 50 different cryptocurrencies available to buy, sell and hold. 

“When we created our institutional platform our initial focus was making cryptocurrency accessible to institutional investors and high net worth individuals,” said Brett Tejpaul, head of institutional coverage at Coinbase, in a release. “The next evolution is to broaden our reach and we are thrilled to be working with ForUsAll.” 

Founded in 2012, ForUsAll represents a small sliver, $1.7 billion, of the $22 trillion retirement investment market, but the firm believes employees want in on digital asset returns.

The demand for cryptocurrency exposure in retirement investment accounts is there, Ramirez said, but investors have not had the opportunity until now, and there are still concerns surrounding security and custody. 

Given crypto’s high volatility, investors have never before had the opportunity to allocate 401(k) contributions into the asset class. Some plans offered by brokers like Fidelity or Charles Schwab allow investors to get indirect crypto exposure through exchange-traded products like the Grayscale Bitcoin Trust, but investors have never been able to hold the assets directly.

“We have been able to solve a lot of those technical challenges or friction points that prevent a lot of ordinary Americans from actually investing in cryptocurrency,” said Ramirez. “We believe that access and security are key, but most important is education so that employees can actually make informed choices with their cryptocurrency allocation as part of a broader retirement portfolio.”

Advantages to investing in crypto through a 401(k) include greater tax efficiency, convenience and security, Ramirez said.