Overview: Cryptocurrency in 401(k) Plans (2025 Update)
1. Policy Shift by Department of Labor (DOL)
In May 2025, the DOL under the Trump administration fully rescinded the 2022 guidance that had urged fiduciaries to exercise “extreme care” before offering crypto in retirement plans, reverting to a more neutral, context-based approach .
2. Executive Order Opening Doors to Crypto
August 7, 2025: President Trump signed an executive order that could allow 401(k) plans to include alternative assets—such as cryptocurrency, private equity, and real estate—pending regulatory revisions by agencies like the DOL and SEC .
3. Market Response & Institutional Momentum
Coinbase CEO predicts crypto will become a fixture in 401(k) plans, especially since Coinbase is now part of the S&P 500, which many retirement plans track .
SEC Chair Paul Atkins emphasized the importance of investor education and disclosure, underlining that integration must be accompanied by clear risk communication .
4. Pros & Cons: Assessing the Risks
Potential Benefits:
Crypto offers portfolio diversification and the possibility of high returns .
Key Risks:
Extreme volatility, lack of regulation, and potential for fraud or loss raise concerns about suitability in retirement savings .
Private assets, including crypto, face criticism for poor transparency, high fees, and illiquidity, which could disadvantage average investors .
Experts suggest using self-directed windows, imposing caps on crypto allocations, and ensuring optional participation to mitigate risk .
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Summary
There's a significant policy shift underway: cryptocurrency is increasingly being accepted within the scope of what can be included in 401(k) retirement accounts. The door is now open—but it’s wide open, which means both opportunities and exposures are growing. How employers and regulators shape the rules, protect savers, and educate participants will determine whether crypto enhances or undermines retirement security.
