On August 7, Trump officially signed an executive order in the Oval Office, directing the Department of Labor, the Treasury Department, and the Securities and Exchange Commission (SEC) to revise guidelines within 90 days, allowing 401(k) plans to include 'alternative assets' such as cryptocurrencies, private equity, and real estate in their investment menu. This order not only overturned the Biden administration's 2022 policy of 'extreme caution' towards crypto assets but could also fully open the $12 trillion retirement savings market in the U.S. to digital assets.
The market goes wild: Bitcoin breaks through $116,000.
Within an hour of the news landing, Bitcoin surged from $114,000 to $116,500, a daily increase of over 2%, breaking the previous high in December 2024 for the first time this year; Ethereum rose 7%, crossing $3,800. Crypto concept stocks like Coinbase and MicroStrategy jumped 8%-12% in pre-market trading, and the stock prices of private equity giants like Blackstone, Apollo, and KKR also rose simultaneously.
According to Galaxy Digital's estimates, if 401(k) assets allocate just 1% to cryptocurrencies, it will bring about $120 billion in new buying; if gradually relaxed to 5% over the next five years, the potential increment could reach $600 billion, equivalent to more than 40% of Bitcoin's current circulating market cap.
Policy core: Three steps to dismantle the 'threshold.'
1. Revoking old guidelines: Directly revoke the Department of Labor's employee benefit memorandum issued between 2022-2024, eliminating the qualitative requirements for crypto assets as 'high risk, high volatility.'
2. Establishing a 'safe harbor': As long as plan managers fulfill their obligations of information disclosure, fee transparency, and investor suitability, they can be exempt from fiduciary liability lawsuits arising from crypto asset price fluctuations.
3. Streamlining regulatory collaboration: Requires the SEC to issue detailed rules on the custody, valuation, and liquidity management of crypto assets within 60 days, allowing banks, trust companies, and registered investment advisors (RIA) to provide crypto custody services for 401(k) plans.
Who benefits the most?
Crypto industry: Institutions like Grayscale, Bitwise, and ProShares have submitted applications to the Department of Labor overnight, hoping to include spot Bitcoin ETFs directly in the core menu of 401(k) plans; Coinbase has signed memorandums of cooperation with large custodial platforms such as Empower Retirement and Fidelity to provide custody and trading infrastructure.
Private equity giants: Blackstone, Apollo, and KKR have been lobbying for the past two years, and now they have finally opened the $12 trillion 'floodgates.' Blackstone has partnered with Vanguard to launch a 'private REIT+crypto mixed strategy,' while Apollo has collaborated with Great Gray Trust to package leveraged buyout funds as 401(k) shares.
Brokerages and advisors: Charles Schwab and Interactive Brokers plan to launch 401(k) self-directed accounts (Brokerage Window), allowing participants to place orders for BTC, ETH, or private fund shares like buying stocks.
Risks: Volatility, fees, and cognitive disparity.
Volatility risk: Bitcoin's 30-day annualized volatility remains as high as 55%, far exceeding the S&P 500's 15%. For individuals over 50, putting more than 10% of their retirement funds into crypto assets could delay retirement dates by several years due to a single 30% drawdown.
Fee erosion: The average management fee plus performance fee for private equity and crypto funds can reach 2%/20%, while traditional 401(k) index funds have total fee rates of only 0.03%-0.1%. Over the long term, high fees can consume more than 20% of terminal returns.
Cognitive gap: A July 2025 survey by the Plan Sponsor Council shows that only 12% of employers claim to 'understand the risk-return characteristics of crypto assets,' while over 60% of business owners worry that employees treat their retirement accounts as a 'crypto casino.'
Future outlook: Gradual penetration rather than an overnight change.
Although the executive order has been signed, it will still take time for crypto assets to truly enter the investment portfolios of ordinary employees.
Second half of 2025: Large tech companies (such as Tesla, MicroStrategy) and Wall Street banks may be the first to open 5%-10% crypto exposure in their self-directed 401(k) plans as a means of brand and talent competition.
2026-2027: Medium-sized enterprises will follow, targeting an allocation ratio of 1%-3%, primarily in ETFs or actively managed funds; the Department of Labor will issue the 'crypto asset suitability questionnaire' for the first time, requiring employees to pass an assessment to gain trading permissions.
After 2028: If market volatility continues to decrease and the regulatory framework is further refined, crypto assets may become a 'regular satellite allocation' in 401(k) plans, similar to REITs and high-yield bonds.
A gamble on 'future retirement'
Trump's executive order has pushed the U.S. retirement system from a 'conservative and steady' course into 'high-risk, high-growth' waters. For 80 million 401(k) participants, this is both a window to share in the growth dividends of the digital economy and a gamble that requires self-accountability. On the balance of returns and risks, the policy has provided maximum freedom, but the final weight still lies in the hands of each investor.