TLDR
- Fidelity Investments launched zero-fee crypto retirement accounts (IRAs) offering exposure to Bitcoin, Ethereum, and Litecoin
- Three IRA options available: tax-free Roth IRA, traditional tax-deferred IRA, and Rollover IRA for transferring funds
- No maintenance fees for the crypto IRA, but a 1% spread applies on buy and sell orders
- Customers must link their Crypto IRA to a Fidelity brokerage IRA for funding transactions
- Available to US citizens over 18 in states where Fidelity Digital Assets supports crypto IRAs
Fidelity Investments has launched a new offering that allows US investors to include cryptocurrencies in their retirement planning.
The financial services giant now provides individual retirement accounts (IRAs) with direct exposure to Bitcoin, Ethereum, and Litecoin, expanding the company’s growing involvement in digital assets.
The new product, called “Fidelity Crypto IRA,” is available to US citizens over 18 who live in states where Fidelity Digital Assets supports crypto IRAs. The launch represents a major step in bringing cryptocurrency investments into mainstream retirement planning.
Three Retirement Plan Options
Investors can choose from three different IRA structures.
- The first is a tax-free Roth IRA, which allows investors to contribute with already-taxed income. Future withdrawals, including any gains, can be made tax-free in retirement.
- The second option is a traditional IRA, where contributions may be tax-deductible. Growth within the account is tax-deferred until retirement, when withdrawals are taxed as regular income.
- The third choice is a Rollover IRA. This option lets investors transfer funds from former employer plans such as 401(k)s or 403(b)s into the new crypto IRA. This maintains the tax-advantaged status of retirement funds while gaining exposure to digital assets.
To use the new service, customers must hold a Fidelity brokerage IRA with the same registration type. This account acts as the funding source for the crypto IRA. Users transfer money from their brokerage IRA to the crypto IRA to make trades.
If a customer doesn’t already have a qualifying Fidelity brokerage IRA, the company will open one alongside the crypto IRA setup. The beneficiaries designated on the brokerage IRA will automatically apply to the crypto IRA as well.
Fee Structure and Asset Selection
Fidelity is not charging maintenance or custody fees for the crypto IRAs. This zero-fee approach applies to opening and maintaining the account. The only cost is a 1% spread on buy and sell orders.
The spread represents the difference between the price a customer receives and the price at which Fidelity Digital Assets sources the cryptocurrency. This pricing model makes the offering attractive compared to many crypto platforms that charge various fees.
The company has limited the initial offering to three cryptocurrencies. Bitcoin is the largest digital asset with a market cap of approximately $1.7 trillion. Ethereum follows as the second-largest at $228 billion.
Litecoin, launched in 2011, ranks as the 23rd largest cryptocurrency with a market cap of $6.4 billion. The selection of these three assets likely reflects Fidelity’s focus on established cryptocurrencies with higher market capitalization and liquidity.
Fidelity’s Growing Crypto Presence
The new retirement accounts are the latest development in Fidelity’s expanding crypto strategy. The firm, which manages over $6 trillion in assets and serves 49 million customers, has been steadily increasing its involvement in digital assets.
In 2022, Fidelity backed EDX Markets, a crypto exchange for institutional investors. The company partnered with Charles Schwab, Citadel Securities, and Paradigm for this venture.
That same year, Fidelity began allowing plan sponsors to add a Digital Assets Account to retirement plan lineups. This earlier move was an initial step toward bringing crypto to retirement savings.
Fidelity received approval from the Securities and Exchange Commission (SEC) last year to launch Bitcoin and Ethereum exchange-traded funds (ETFs). The Fidelity Wise Origin Bitcoin Fund (FBTC) has generated nearly $11.4 billion in net inflows, ranking second among similar funds.
The Fidelity Ethereum Fund (FETH), launched in July 2024, has received about $1.4 billion in net inflows. This also ranks as the second-highest among comparable funds.
Reports indicate Fidelity Digital Assets is testing a stablecoin, though there are no immediate plans to bring it to market. The company is also exploring the tokenized U.S. Treasury market, showing its interest in various blockchain applications.
