Nine trillion pension funds flood into the cryptocurrency market, with Trump’s order opening the floodgates for a bull market!
Recently, Trump signed an executive order allowing U.S. 401K pension funds to invest in cryptocurrencies. This means that up to $9 trillion in retirement funds now has the opportunity to flow into the crypto market for the first time!
What is a 401K pension fund?
401K is a tax-deferred retirement savings plan introduced in 1981, named after Section 401 of the U.S. Internal Revenue Code. It is a supplemental pension insurance provided by private enterprises for their employees, funded jointly by employers and employees.
Funding sources: Employees can contribute 1%-15% (up to a limit) of their salary to their 401K accounts each month, and employers will match a certain percentage (Employer Match).
Tax benefits: Contributions are tax-free in the year they are made, and the interest, dividends, and investment returns within the account are also tax-free; personal income tax is paid only upon retirement withdrawals.
Investment scope: In the past, 401K accounts could not directly purchase stocks and could only invest in products provided by fund management companies designated by the employer; the new regulations allow these funds to allocate cryptocurrency.
Contribution limit: The annual limit for 2025 is $23,500, which is an increase of $500 from last year.
Applicable population: Provided by enterprises, with no special income restrictions.
Withdrawal rules
Minimum withdrawal age: 59.5 years, can withdraw without penalty
Early withdrawal penalty: Withdrawals made before reaching the age must pay a 10% penalty (with exceptions for special circumstances such as significant medical expenses, unemployment health insurance after 12 weeks, disability, death of the holder, leaving a job after 55, etc.)
Mandatory withdrawals: After age 70.5, a portion of the funds must be withdrawn each year, or a penalty is incurred, and no further contributions can be made.
Significance
The entry of $9 trillion in long-term funds will bring unprecedented incremental capital to the cryptocurrency market. This is not only a breakthrough at the institutional level but may also become an important catalyst for driving the next bull market.
Daily focus: ASR OG A2Z BIO BB
