Some 401(k) participants will soon be able to invest part of their 401(k) directly into the constituents of the CoinDesk Market Select Index (CMIS) under terms of a deal announced today by ForUsAll and CoinDesk Inc.
In a release announcing the deal, CoinDesk Inc. said this option “will provide 401(k) investors the freedom to create diversified portfolios using some of the largest and most liquid digital assets,” and added that this is the first index-based digital asset offering available on a 401(k) platform in the United States.
“By leveraging CMIS, we can provide sophisticated self-directed investors access to a broad, diversified universe of the largest and most liquid crypto assets.”
ForUsAll CEO David Ramirez
San Francisco-based 401(k) provider ForUsAll lays claim of being the first retirement provider to offer 401(k) investors direct access to cryptocurrencies. By expanding the available universe to include the CMIS constituents, 401(k) savers will now be able to invest in its 28 underlying constituents (or “coins”). The CMIS includes better-known cryptocurrencies such as bitcoin, ethereum and litecoin as well as many lesser-known coins.
“Forty-six percent of younger workers want the freedom to invest in the rapid development of blockchain technology. Like many institutional investors, they believe blockchain is a potentially transformative technology,” said David Ramirez, CFA, CEO of ForUsAll. “By leveraging CMIS, we can provide sophisticated self-directed investors access to a broad, diversified universe of the largest and most liquid crypto assets.”
With the recent SECURE Act 2.0 and Safe Harbor 401(k) rules, the Ramirez notes the federal government is encouraging small businesses and startups to offer retirement plans, including tax credits of up to $16,500 to cover the plan for the first 3 years.
“While new regulations make it easier for employers to offer 401(k)s, getting younger workers to save is harder than ever. Providing access to crypto alongside traditional diversified mutual funds helps us engage the next generation of retirement savers,” Ramirez said.
To bring the solution to market, ForUsAll partnered with CoinDesk Indices (CDI), which the release says is the leading provider of digital asset indices and creator of the Digital Asset Classification Standard (DACS). The index is unique in that it is derived through a taxonomy that assigns eligible digital assets by their use cases to defined industries, industry groups and sectors. Leveraging the DACS, and applying a methodology with select eligibility criteria, the CMIS measures the market capitalization weighted performance of the constituents, currently encompassing 89% of the overall digital asset landscape that include assets from each of the Select Sectors.
“We are thrilled about the partnership with ForUsAll to help them enable access to the digital asset market,” said Jodie Gunzberg, CFA, Managing Director, CoinDesk Indices. “CMIS offers exposure to digital assets with confidence that the assets meet our quality standards intended for tradability. For example, the index rules initially eliminated FTT since it wasn’t priced by at least two eligible exchanges.”
Gunzberg singled out the exclusion as evidence of the index’s integrity. FTT, the beleaguered FTX’s exchange cryptocurrency, was valued at more than $3 billion before FTX’s well-publicized implosion. As of today, FTT had a live market cap of $466,637,603 USD.
Forbes reports that since its inception in July last year, the CMIS has swung from a peak of almost 1,200 points in August 2022 to just over 700 points in the aftermath of the FTX collapse.
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