Fidelity is offering 401(k) investors access to bitcoin, the first retirement-plan provider to do so

Fidelity Investments will be the first provider to offer retirement savings with the option to put digital currency in their 401(k)s.

Fidelity will be able to administer retirement accounts for 23,000 employers by mid-year 2022. Fidelity is the nation's largest retirement-plan provider with $11.3 trillion in assets under administration.

Dave Gray, head of workplace retirement, said there is growing interest from plan sponsors for vehicles that enable them to provide their employees access to digital assets in defined contribution plans, and in turn from individuals with an appetite to incorporate cryptocurrencies into their long-term investment strategies.

MicroStrategy will be the first company to offer a retirement plan with the virtual currency. The news was reported by the Wall Street Journal.

Regulators have cautioned against using cryptocurrencies in 401(k)s. The Department of Labor asked plan fiduciaries to exercise extreme care before they consider adding a cryptocurrencies option to a 401(k) plan.

Concerns of speculation, volatility and high valuation were cited by the Department of Labor. It warned of major custodial and recordkeeping issues, saying that simply losing or forgetting a password can result in the loss of the asset forever.

Fidelity said that the Digital Assets Account is a custom plan account that holds both short-term and long-term money market investments to provide the necessary flexibility for the account to facilitate daily transactions on behalf of the investor.

Fidelity Digital Assets custody platform will be used to hold the DAA.