Bitcoin

Fidelity ceases allowing investors Bitcoin/USD punts in Individual Retirement Accounts

**iNVEZZ.com, Friday 13 December:**

The world’s largest provider of Individual Retirement Accounts (IRA), Fidelity, no longer allows clients to allocate savings in the Bitcoin Investment Trust.
Fidelity previously partnered with SecondMarket’s open-ended trust, which only bets on the digital currency. The trust fund is only open for institutional players and accredited investors that had earned more than $200,000 in each of the last two years or had net worth of more than $1 million, excluding their primary residence. The minimum deposit in the Bitcoin Investment Trust, launched in late September, is $25,000. As of Tuesday, the fund had $62.6 million in assets under administration.

SecondMarket’s chief executive Barry Silbert posted the following statement yesterday afternoon: “The Bitcoin Investment Trust was previously approved by Fidelity as an eligible investment for accredited clients in their self-directed IRA accounts and investments began closing last week. We understand that Fidelity has decided to re-evaluate this decision.”

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Meanwhile, a Fidelity spokesman stressed on Thursday that only “on an individual basis” were clients allowed to invest in the now-famous trust fund. Rob Beauregard, director of public relations at the multinational financial institution with $4.2 trillion in assets under management, refrained from comments when or why the policy was changed. “There are reviews going on, and we’ll make a decision at a later date”, added Beauregard.

Fidelity’s verdict comes at a time when central banks around the globe have issued numerous cautionary statements about the risks associated with bitcoins. This week both the French national bank and New Zealand’s central bank followed suit, while today the European Banking Authority said there was no protection or compensation for people using the digital currency.

“Currently, no specific regulatory protections exist in the EU that would protect consumers from financial losses if a platform that exchanges or holds virtual currencies fails or goes out of business”, alerted the European Union’s banking watchdog.
The European regulator also urged users to “exercise the same caution with your digital wallet as you would do with your conventional wallet or purse”. The watchdog advised consumers not to keep large amounts of money in their digital wallets for an extended period.
The parabolic rise of bitcoin’s value this year has raised alarm bells, with economists warning that it is a speculative bubble due to a lack of fundamental support. Nevertheless, the crypto-currency has continued climbing today, but has failed to exceed the psychological level of $1000.
Right now, one bitcoin is trading on the prominent Mt Gox exchange at around 955.83, up 5.29 percent intraday.

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