Fidelity Launches Crypto IRAs with Bitcoin, Ethereum, and Litecoin Exposure

TLDR

• Fidelity Investments is launching crypto IRAs with exposure to Bitcoin, Ethereum, and Litecoin
• Three IRA options are available: Roth IRA (tax-free), Traditional IRA (tax-deferred), and Rollover IRA
• No maintenance or custody fees, but a 1% spread applies on transactions
• Customers must link their crypto IRA to a Fidelity brokerage IRA as a funding account
• Available to US citizens over 18 in states where Fidelity Digital Assets operates

Fidelity Investments, one of America’s largest financial institutions, has announced the launch of cryptocurrency retirement accounts that will allow US investors to include digital assets in their long-term savings plans. This new offering enables direct exposure to Bitcoin, Ethereum, and Litecoin through tax-advantaged individual retirement arrangements (IRAs).

The retirement giant is making these crypto IRAs available to US citizens aged 18 and older who live in states where Fidelity Digital Assets operates. This move expands Fidelity’s growing involvement in the cryptocurrency space, which has already included launching Bitcoin and Ethereum exchange-traded funds (ETFs).

The company is offering three different IRA options to suit various investor needs. The Roth IRA allows investments with already-taxed money for tax-free growth, while the Traditional IRA offers tax-deferred potential earnings. A Rollover IRA option enables transfers from former employer plans such as 401(k)s and 403(b)s.

Zero-Fee Structure

In a move that may attract cost-conscious investors, Fidelity has decided not to charge any maintenance fees for opening or maintaining a crypto IRA. Custody services for the digital assets will also be free of charge.

However, the company will apply a 1% spread on buy and sell orders. This spread represents the difference between the price a client receives and the price at which Fidelity Digital Assets sources the asset to fill the order.

To participate in the program, customers must hold a Fidelity brokerage IRA with the same registration type as their crypto IRA. This brokerage account serves as the funding source for cryptocurrency transactions.

If an investor doesn’t already have a qualifying Fidelity brokerage IRA, the company will open one alongside the crypto IRA during the setup process. This requirement creates a streamlined system for moving funds between traditional investments and digital assets.

Asset Selection and Features

Fidelity’s decision to include only Bitcoin, Ethereum, and Litecoin in its crypto IRAs reflects a focus on established digital assets. These cryptocurrencies have longer track records and higher market capitalization and liquidity compared to newer alternatives.

Bitcoin currently holds the largest market cap at approximately $1.7 trillion, while Ethereum follows with around $228 billion. Litecoin, which launched in 2011 as a faster and cheaper Bitcoin alternative, has a market cap of about $6.4 billion.

The crypto IRAs will maintain familiar features that Fidelity customers expect from traditional retirement accounts. For example, beneficiary management will mirror the designations established on the linked brokerage IRA. Customers can update these beneficiaries through the standard brokerage IRA platform.

This new offering represents the latest expansion from Fidelity Digital Assets, the company’s specialized arm for cryptocurrency custody, trading, and management. Fidelity has been increasing its crypto offerings in recent years.

In 2022, Fidelity backed EDX Markets, a crypto exchange for institutional investors, alongside other Wall Street giants like Charles Schwab, Citadel Securities, and Paradigm. That same year, the company began allowing plan sponsors to add a Digital Assets Account to their plan lineup.

More recently, Fidelity has found success with its Bitcoin and Ethereum ETFs. The Fidelity Wise Origin Bitcoin Fund (FBTC) has generated nearly $11.4 billion in net inflows, making it the second most popular among the 11 Bitcoin ETFs currently trading.

Similarly, the Fidelity Ethereum Fund (FETH), which launched in July 2024, has received about $1.4 billion in net inflows. This ranks it second among the nine Ethereum ETFs on the market, according to data from UK asset manager Farside Investors.

Beyond retirement accounts and ETFs, reports indicate that Fidelity is exploring other cryptocurrency initiatives. According to sources, Fidelity Digital Assets is actively testing a stablecoin it has developed, though there are no immediate plans to bring this token to market.

The company is also exploring opportunities in the tokenized U.S. Treasury market, reflecting a broader interest in blockchain applications beyond just cryptocurrencies.

With over $6 trillion in assets under management and approximately 49 million customers, Fidelity’s entry into crypto retirement accounts could potentially direct large amounts of capital toward digital assets. The offering provides a regulated, familiar pathway for retirement savers to gain exposure to cryptocurrencies.