U.S. President Donald Trump signed an executive order allowing 401(k) investors to diversify their portfolios with alternative assets, including cryptocurrency.
This executive order directs the U.S. Department of Labor to work with agencies such as the SEC and the Treasury Department to develop regulations supporting investment diversification, helping the 401(k) retirement plan access the cryptocurrency market more effectively and safely.
MAIN CONTENT
The decree allows diversification of 401(k) investments into alternative assets, including cryptocurrency.
The Department of Labor works with the SEC and the Treasury Department to create an appropriate legal framework.
Accessing cryptocurrency through ETFs and stocks holding cryptocurrency is expected to drive market growth.
How does President Trump's executive order affect the cryptocurrency and Bitcoin market?
The executive order opens up the possibility for 401(k) investors to access cryptocurrency through tightly managed investment channels.
With over $8.7 trillion accumulated through the 401(k) plan, this move will expand the capital flowing into the cryptocurrency market, contributing to the upward price trend. 401(k) managers can invest in prominent cryptocurrency ETFs such as Bitcoin, Ethereum, and corporate stocks holding cryptocurrency assets, helping to diversify portfolios and increase profit opportunities for workers.
This is especially significant as large institutions play a role in driving Bitcoin to record high prices before the 2034 halving event, indicating that the influence from new capital flows will continue to support growth.
“Alternative assets such as private equity, real estate, and digital assets provide competitive returns and diversification benefits. Overregulation and litigation risk have limited ERISA investment funds in including alternative assets in their portfolios, reducing the retirement growth rate for workers.”
Excerpt from Executive Order of President Donald J. Trump, 2025
How will the Department of Labor and regulatory agencies coordinate to support investment diversification?
The executive order requires the Department of Labor to work with the U.S. Securities and Exchange Commission (SEC), the Department of the Treasury, and related organizations to develop a standardized legal framework for 401(k) investment in alternative assets.
This coordination aims to ensure that cryptocurrencies are clearly classified according to each agency's regulations, facilitating and reducing legal risks for investors. The goal is to help workers access a diverse range of assets with appropriate legal protections, while also promoting the sustainable development of the retirement and cryptocurrency markets.
What forms of cryptocurrency investment are currently accessible to 401(k) under the order?
401(k) can now invest in cryptocurrency ETFs in cash form, with representative assets being Bitcoin and Ethereum.
In addition, 401(k) fund managers also have the opportunity to access stocks of major companies investing in cryptocurrency reserves, such as stocks of some businesses on Nasdaq, thereby leveraging the growth advantage of the cryptocurrency market through indirect channels. This form helps diversify portfolios with a more tightly controlled risk level.
What are the highlights of comparing cryptocurrency investment through 401(k) with other channels?
Criteria 401(k) Cryptocurrency Investment Direct investment on exchanges Legal framework Strict compliance, coordination with the Department of Labor and SEC Dependent on exchange and national regulations, higher legal risk Diversification Through ETFs and stocks with cryptocurrency assets Often direct purchase of Coin/Token Risk Thoroughly analyzed, risk reduced due to professional management Higher due to market volatility and security Convenience Automatic in retirement plans, long-term integration Requires knowledge and separate management time
Frequently Asked Questions
Does the new executive order change the scope of 401(k) investments?
The order allows the addition of alternative assets, including cryptocurrency, to 401(k) investment portfolios to increase diversification and returns.
How is cryptocurrency allowed to be invested through 401(k)?
Through ETFs and corporate stocks holding cryptocurrency, ensuring compliance with regulatory requirements.
Which agency does the Department of Labor collaborate with to support the executive order?
The Department of Labor is working with the U.S. Securities and Exchange Commission (SEC) and the Treasury Department to build a complete legal framework.
What is the impact of the executive order on the cryptocurrency market?
Create new capital flows from a large amount of assets in 401(k), driving growth and price increases in the cryptocurrency market.
Can individual investors benefit from diversified 401(k) investments with cryptocurrency?
Workers participating in 401(k) will benefit from diversification into alternative assets without the need for direct investment.
Source: https://tintucbitcoin.com/bitcoin-duoc-phep-vao-quy-401k/
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