Yahoo Finance’s Jennifer Schonberger joins the Live show to discuss the surge in the price of dogecoin after news broke of Elon Musk’s Twitter takeover as well as reports that financial services company Fidelity will allow bitcoin in 401(k) retirement plans.
JULIE HYMAN: Dogecoin is trading higher. That’s after Elon Musk’s Twitter takeover prompted a big rally in the digital currency. Yahoo Finance’s Jennifer Schonberger joins us now to explain why. Obviously, there is sort of a long standing connection between Musk and Dogecoin.
JENNIFER SCHONBERGER: That there is, Julie. Good morning. New analysis by cryptowallet.com of Google online searches finds that there is a surge in online searches for buy Dogecoin after the news broke that Elon Musk is buying Twitter. Of course, Musk is one of the biggest endorsers of Dogecoin, with a single tweet sparking a surge in the cryptocurrency’s price. Musk accepts Dogecoin as payment for certain Tesla merchandise.
Now Dogecoin supporters are hoping that Musk could boost its usage and integrate it more with Twitter after he takes over the social media platform. Musk has tweeted about making changes to Twitter, proposing that perhaps Twitter Blue, the platform’s first subscription service, should be ad-free, and that maybe there should be an option for users to pay using Dogecoin. The meme cryptocurrency jumped as much as about 27% after the announcement that Musk is buying Twitter. Dogecoin up about 11% in today’s session.
Meanwhile, Twitter shares had ended yesterday higher about 5.6%. This morning, though, down, I think, a little bit better than 1%. Musk, of course, buying Twitter in a $44 billion deal that will take that social media giant private. Julie.
BRIAN SOZZI: Jen, some big news from Fidelity here on the crypto front.
JENNIFER SCHONBERGER: That there is, Brian. Fidelity announced this morning that it is going to be offering employers the opportunity to offer Bitcoin in their 401(k)s to employees. They’re going to offer as much as 20% exposure, though employers will have the option to cap that at perhaps less. They are only offering the option to invest in Bitcoin right now, although they will enlarge the entree, or the menu, I should say, of cryptocurrencies as time goes on. No specific date on that at this point.
Now, Fidelity is the first major retirement plan provider to offer this. They’re offering the option. Let’s see if employers are willing to offer this to employees. We did see this morning that Michael Saylor, who heads up MicroStrategy, is going to offer employees the option to invest in Bitcoin. Of course, he’s a staunch supporter of Bitcoin, though I will note that the US Labor Department has warned, which overseas employer retirement plans, has warned about offering the opportunity to invest in crypto, as it’s quite volatile, as you know.
And if you’re saving for retirement, perhaps you want to be a little bit more conservative, depending how far you have to retire. So perhaps maybe just 1% to 2% offers a bit of portfolio diversification, while offering the opportunity to hit it out of the park. We’ll see. The point here, Brian, is, this is a major milestone for crypto, underscoring that it is becoming a mainstream investment class.
JULIE HYMAN: Yeah, I mean, and that’s the folks who are bulls on Bitcoin. Adoption, adoption, adoption is sort of the word that they like to use quite frequently. And this is a pretty significant step in the direction of wider scale adoption.
JENNIFER SCHONBERGER: Absolutely. I mean, we did see last fall, the SEC offer the Bitcoin futures ETF, which makes it a little bit easier to gain exposure. But for the most part, people have really had to still go to cryptocurrency exchanges, like a Coinbase, like a Binance, and convert their dollars into crypto to get some sort of exposure there. And there’s a bit of a learning curve there.
So now that Fidelity is going to make this seamless for employers to offer this through 401(k), you just got to check off the bucket list. Absolutely this could create some sort of lure, perhaps, underneath Bitcoin’s price, depending how many employers, of course, decide to adopt this and how much exposure people are willing to take on.
BRIAN SOZZI: Interesting, indeed. Jennifer Schonberger, thanks so much.