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Coinbase Enables 401(K) Provider To Offer Crypto Investment Option

Coinbase Enables 401(K) Provider To Offer Crypto Investment Option

June 10, 2021 at 05:03PM
by PYMNTS

ForUsAll, a 401(k) provider, plans to give some workers the option to invest in cryptocurrencies starting in July.

The magazine 401(k)Specialist reported on Monday (June 7) that ForUsAll was partnering with Coinbase Institutional to offer cryptocurrencies as part of its retirement options.

San Francisco-based ForUsAll, a retirement investment platform for small businesses, is offering Alt 401(k). The new plan allows employers to provide alternative investment options within its 401(k), the first one being cryptocurrencies.

“By introducing the Alt 401(k), we are democratizing access to what drives wealth for the wealthy — alternative investment options, combined with our original core offering of low-cost index funds, and personalized help,” said Jeff Schulte, CEO of ForUsAll.

The company, which was founded in 2012, provides automated 401(k) administration, menus of low-cost mutual funds and access to human advisers. The company has 400 employer clients.

Employers have the choice to include cryptocurrency as part of the investment lineup. From there, workers can transfer up to 5 percent of their portfolio to over 50 cryptocurrencies. According to the magazine’s report, ForUsAll monitors allocations and alerts employees if their overall cryptocurrency allocation exceeds 5 percent.

“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. Now he said, “the next evolution is to broaden our reach.”

The Wall Street Journal reported on Thursday (June 10) that with its $1.7 billion in retirement assets, ForUsAll is just a bit player in the $22 trillion retirement account market. While investing in cryptocurrencies is gaining more interest, there are pitfalls. Bitcoin, for example, has lost around 40 percent of its value in just two months after hitting a record high in April.

“There is way too much volatility,” Lew Minsky, president of the trade group Defined Contribution Institutional Investment Association, told the WSJ.

Nonetheless, at the end of April, Coinbase said it was partnering with PayPal to give consumers cryptocurrency options. The setup allows people to use debit cards and bank accounts linked to PayPal to buy cryptocurrencies.