#CryptoIn401(k)
What’s Going On?
Trump’s Executive Order (August 7, 2025)
President Donald Trump signed an executive order instructing regulatory agencies—including the Department of Labor (DOL) and the Securities and Exchange Commission (SEC)—to revisit guidance under ERISA. The goal? To allow alternative assets—such as cryptocurrencies, private equity, and real estate—to be included in 401(k) retirement plans .
This marks a reversal of the Biden-era policy, which had urged plan sponsors to take “extreme care” before offering crypto, effectively discouraging its inclusion .
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Why It Matters
Vast Untapped Capital: U.S. defined-contribution plans, including 401(k)s, manage nearly $9 trillion—potentially opening a massive new pipeline into crypto and other alt-assets .
Market Reaction: Bitcoin and Ethereum logged gains—up ~2% and ~7%, respectively—on initial optimism .
Slow Rollout Expected: Implementation could take years. Agencies must develop regulations, and plan sponsors must evaluate legal risks and update offerings .
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Risks to Watch
Volatility & Liquidity: Cryptocurrencies are highly volatile and less liquid than traditional investments.
Regulatory & Legal Concerns: Fiduciaries face heightened responsibility and litigation risk if losses occur .
High Fees & Complexity: Alt-assets often involve steeper costs and complexity relative to stocks or bonds .
Financial advisors generally recommend caution, suggesting only 1–2% portfolio exposure for investors who can tolerate elevated risk .
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Quick Summary Table
Topic Details
What Changed Trump’s EO allows crypto and other alternative assets in 401(k)s
Why It Matters Opens up potentially trillions in retirement capital to digital assets
Who Gains Asset managers, crypto firms, and alternative asset providers
When It Takes Effect Not immediate—rulemaking and plan updates likely extend into 2026+
Risks Market volatility, fiduciary risk, higher fees, regulatory uncertainty
Investor Advice Keep exposure small (1–2%), consider financial advice, proceed cautiousl
