U.S. President Trump is once again taking action, this time targeting the retirement system that every worker cares about. According to senior White House sources, Trump will sign an executive order on Thursday allowing retirement plans such as 401(k)s to include alternative assets such as cryptocurrencies, private equity, and real estate. This order not only has the potential to reshape the allocation of retirement assets across the U.S. but also opens new entry points for high-risk assets like Bitcoin.
Trump's executive order aims at the liberalization of pension investments.
Trump is expected to sign an executive order on Thursday at noon that will instruct the U.S. Department of Labor to re-examine the fiduciary guidance under the Employee Retirement Income Security Act (ERISA) regarding investments in the private market. This federal regulation has long been a core law governing 401(k) and other Defined Contribution Plans.
According to Bloomberg, this policy is a major victory for the alternative asset industry. For years, asset managers, including those dealing with cryptocurrencies and private equity, have lobbied to include these assets in ordinary retirement account investment options. Now, concrete results are finally seen during Trump's term.
Bitcoin reacts enthusiastically, private equity shares slightly rise.
As the news broke, Bitcoin prices surged, demonstrating the market's high expectations for the new policy. Shares of private equity giants like Apollo Group also saw a slight uptick in early trading on Thursday. This indicates a market optimism about potential inflows resulting from 401(k)s opening up to alternative assets.
Why have 401(k)s traditionally excluded private and crypto assets?
Although university endowments and large retirement funds have long included private equity and real estate in their portfolios, 401(k)s have historically shied away from such assets. The main reasons include:
High management fees
Lack of transparency in investment information
Longer lock-up periods and low liquidity
These factors lead to a perception of higher risk and less friendliness towards general investors. However, as early as 2020 during Trump's first term, the Department of Labor issued a communication indicating that private assets could be included in defined contribution retirement plans under certain conditions. This policy was confirmed even after the Biden administration took office.
The layout of alternative assets in 401(k)s has quietly begun.
In fact, the market has long been preparing for this wave of change. As of the first quarter of 2025, the total assets in 401(k) accounts across the U.S. amount to approximately $8.7 trillion, and asset managers and pension plan providers are already gearing up.
For example, in June of this year, the world's largest asset management company BlackRock announced that it would launch a target-date 401(k) fund in the first half of 2026, with 5% to 20% of assets allocated to private investments. In May, Empower, the second-largest pension provider in the U.S., also stated it would partner with companies like Apollo to start accepting private assets in some accounts by the end of the year.
How will Trump's policy affect your pension?
This executive order signifies that 401(k)s will no longer be limited to stocks and bonds; a more diversified asset allocation is expected to enhance long-term return potential. However, investors should also be reminded that private equity and crypto assets carry both risks and rewards, have high entry barriers, and low liquidity, making them unsuitable for every investor.
In the future, after the Department of Labor updates its guidelines, whether major 401(k) platforms adopt them and how they design products and risk control mechanisms remains to be seen.
The beginning of investment freedom or a trial of risk?
Trump's latest executive order is not only a positive for the alternative asset industry but also signals a significant change in the U.S. retirement investment landscape. For investors, this could be the beginning of the liberalization of investment choices; for regulators and retirement plan designers, it presents a new challenge in risk management.
This article is reprinted with permission from: (Chain News)
Original title: (Pensions can buy cryptocurrency! Trump signs executive order: 401(k) will open to invest in cryptocurrencies and private assets)
Original author: Elponcho
'American pensions can buy cryptocurrency! Trump signs order: 401(k) will open to invest in cryptocurrencies and private assets.' This article was first published on 'Crypto City'.
