With an executive order, Trump expanded the investment menu of the largest retirement pool in the U.S.—the 401(k) plan—from a 'traditional three dishes and one soup' to an 'alternative buffet', with new options including private equity, real estate, and digital assets (such as Bitcoin and Ethereum). This is a historical first, allowing long-term funds amounting to $9 trillion, covering 90 million Americans, to begin engaging with the crypto market. Although this 'elephant' may take another six months to two years to truly step in, once it starts to move slowly, this stable and persistent buying pressure may become a source of vitality for the future 'slow bull' market in crypto spot trading.
What is a 401(k) retirement plan: initiated by employers, participated in by employees, with automatic deductions, and a long-term saving mechanism.
A 401(k) is a long-term retirement savings account set up by U.S. employers for their employees, with tax benefits. Employees can choose to deposit a portion of their salary into this account without paying taxes first, and withdraw it for spending upon retirement. Employers prepare an investment list (usually with 20-30 funds), and employees decide how much salary to invest (for example, 6%), then choose funds from the list and allocate proportions. Salaries are automatically deducted, and employers usually provide a 'matching' contribution—like matching half of what you invest, as a benefit.
Decision-making power in the 401(k) plan lies with the employer, who must act as a 'prudent steward'.
In a 401(k), employers have significant say over which funds can be included in the list, and employees can only choose from the list without adding their own options. When selecting fund companies or custodians, employers must adhere to the 'prudent man rule'—meaning they must be as careful as if managing money for their own family. If a wrong choice leads to employee losses, employers may bear legal liability.
The scale of the 401(k) plan is enormous: nearly $9 trillion, with participation from over 90 million people.
According to data from the U.S. Department of Labor, total 401(k) assets were about $8 trillion in 2021; the Investment Company Institute estimates that by the first quarter of 2025, this number will reach $8.7 trillion. The White House also revealed that over 90 million Americans are already using this plan.
Analyst viewpoint: even if 401(k) plans only allocate 2% of their funds, the crypto market could instantly gain $170 billion—equivalent to nearly two-thirds of the existing crypto spot ETFs and listed reserves.
The funds' deployment will require three steps.
Don't rush to celebrate; money won't pour in tomorrow, and the expected deployment period is at least six months to two years.
Which type of crypto asset is most likely to be the first to get onboard?
Crypto spot ETFs are the most highly anticipated, as they are regulated by the SEC, have strong compliance, stable custody and valuation mechanisms, and good liquidity. They may likely be included in target date funds (TDFs) or balanced funds, with proportions possibly below 5%, but the impact remains significant.
Why is this different from 2020?
In 2020, during Trump's term, the Labor Department also hinted at allowing 401(k) plans to access private assets, but because it was a departmental initiative and due to the low liquidity of private assets, it ultimately led to minimal action. This time is completely different:
According to SoSoValue data, the MAG7 index token, which is allocated to the top seven tokens, rose nearly 5% in the past 24 hours and outperformed Bitcoin by 15.58 percentage points over the year—indicating that while funds have not yet arrived, market imagination has already made its way.
The executive order reiterated his slogan—making America the 'world capital of cryptocurrency' and highlighted that embracing digital assets is the inevitable path to driving economic growth and technological leadership.
In summary: this is a long-distance race that may last several years. When the $9 trillion retirement fund elephant extends even one leg into the crypto market, it will change the foundation of the entire spot ecosystem.