Bitcoin in your 401(k)? What to consider before deciding if it’s right for you – Bankrate.com

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Fidelity Investments recently announced that it’s planning to allow investors to purchase Bitcoin through their 401 retirement plans.

The price of Bitcoin has run up in recent years, after starting from nothing, and that may have given the impression that there’s some underlying value to the cryptocurrency.

Over time the stock will rise and fall according to how well that underlying business performs. So, highly successful businesses such as Amazon will have stock that rises significantly in price over time.

“There is no rational or fundamental way to determine the value of Bitcoin or any of the other various cryptocurrencies, as one can’t apply the tools of traditional finance to arrive at the intrinsic value of the supposed asset,” says Robert R.

“I can think of few worse strategies than committing retirement funds in tax-advantaged accounts to cryptocurrencies,” says Johnson.

If you’re still interested in buying cryptocurrency, however, ask yourself a few questions to see whether it makes sense for you and your situation.

Even beyond these questions, you should consider how crypto fits into your retirement portfolio.

“This is a great way for Fidelity to show it’s a responsive, cutting-edge brand that’s eager to meet popular demand for its customers,” says Barnes.

A great way to do this is to buy an index fund based on the S&P 500, which is available at low cost and has an enviable track record of returns over time.

Bankrate is compensated in exchange for featured placement of sponsored products and services, or your clicking on links posted on this website.

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