UnusualWhales

US Senators Richard (Dick) Durbin, Elizabeth Warren, and Tina Smith sent a letter to Fidelity on Monday, November 21st, urging Fidelity to reconsider its exposure to cryptocurrencies. Their primary concern is with Fidelity’s inclusion of Bitcoin into some of its 401(k) pension plans.

In light of the recent stunning events in the digital asset market, we write today as a follow-up to our previous letter sent on July 26, 2022. Once again, we strongly urge Fidelity Investments to reconsider its decision to allow 401(k) plan sponsors to expose plan participants to Bitcoin. Since our previous letter, the digital asset industry has only grown more volatile, tumultuous, and chaotic—all features of an asset class no plan sponsor or person saving for retirement should want to go anywhere near.

The Senators focus on the recent implosion of FTX and the subsequent shockwaves it sent throughout the sector. The letter also makes mention of the collapse in Bitcoin’s value seen throughout 2022 but specifically cites the first cryptocurrency’s July value of $21,000 and compares it to November’s price of just under $17,000. The three Senators conclude the letter by comparing digital assets exposure to trying to capture lightning in a bottle. They say:

Any investment strategy based on catching lightning in a bottle, or motivated by the fear of missing out, is doomed to fail.