Hooray!

At long last, the company managing my 401(k) plan will allow me to bet up to 20% of my retirement funds on a digital Ponzi scheme that generates no income and has no practical use.

Fidelity Investments, the biggest manager of 401(k) plans in the country, has announced that it will soon allow bitcoin
BTCUSD,
+0.28%

among the investible assets, alongside stocks, bonds, real-estate investment trusts and the like. This is probably terrific news for bitcoin. But whether it is equally good news for 401(k) plans remains to be seen.

Read: Bitcoin in your 401(k)? Fidelity just introduced it as an option – when it makes sense, and when it doesn’t

Why is this good for bitcoin? Simple. It gives this very, very, very long string of 1s and 0s a further patina of financial respectability. If a company as renowned as Fidelity is going to allow it in retirement plans, it must be OK, right? And, naturally, this move will greatly increase the market for bitcoin, whose only use seems to be to sell it to other people. Fidelity handles the retirement accounts of 23,000 companies. Its clients have over $11 trillion in their accounts. That’s about 14 times the alleged value of all the bitcoin in the world.

I asked Fidelity why they were making this move. The short answer: Because the customers want it. Fidelity manages 401(k) and other defined-contribution plans on behalf of employers. And a growing number of them have…

Read more…