Recently, the discussion about whether China's pension funds are "sufficient and can maintain purchasing power" is very heated. Across the ocean in the United States, the pension sector has also seen significant waves. Not long ago, Trump launched a major move - signing an executive order, opening a new avenue for American's 401(k) retirement accounts: in the future, this money used for retirement may be able to buy "trendy assets" like cryptocurrencies.
I. How did 401(k) suddenly get involved with cryptocurrencies?
In the past, American's 401(k) was like a "steady money bag," and the money in it could only be invested in "old acquaintances" like stocks, bonds, and index funds. But this time, Trump waved his hand, requiring regulators to re-examine the rules and invite "unconventional players" such as cryptocurrencies, private equity funds, and real estate into the investment list. Although you can't directly buy cryptocurrencies yet, the closed door has quietly revealed a crack.
II. 401(k) money is naturally a master of "slow and steady" accumulation
- Locked in tight: This money can't be touched until you're 59 and a half. Want to take it out early? Get ready to pay a penalty and taxes. So, thinking of using it for short-term crypto trading? No way! It's born to be a long-term investment.
- Steady investment: As soon as your salary is paid, the money is automatically transferred into the account, like a steady stream, constantly filling it up.
- Less trading: Unlike the hot money in exchanges that's bought and sold every day, once 401(k) money is invested, it might sit there for years. This means there will be less Bitcoin and Ethereum circulating in the market. Especially for Bitcoin, which has a fixed total supply, this slow and steady buying is like water dripping on stone, and over time, the accumulated power is considerable.
III. Is a new round of long-term bull market coming?
The money in spot ETFs is like a "revolving lantern," coming and going quickly. For example, at the beginning of the year, when Ethereum spot ETFs appeared, funds fled, and the currency price immediately fell sharply. But the money in 401(k)s is different, it slowly flows into the market, adding a "stabilizer" to the market.
As more and more 401(k)s start allocating a share to cryptocurrencies, gradually climbing from a 1% allocation to 3% or 5%, this pool of money will become increasingly full. At that time, the market may not fluctuate as much as before, but the "center line" of prices will move upwards step by step. Looking at it this way, this may be the real long-term bull market, and it's just begun.
