I stared at the breaking news on the screen, my finger hovering over the keyboard unable to type—inside the Oval Office, Trump officially signed an executive order allowing 401(k) retirement accounts to invest in cryptocurrencies. The time in the bottom right corner of the screen showed noon Eastern Time on August 7, and Bitcoin's price violently surged $2,000 within 15 minutes after the news broke, breaking through the $116,000 mark, with the K-line almost shooting up at a 90-degree angle.

The fatigue of staying up late to watch the market is instantly washed away by a torrent of adrenaline. This is no longer just ordinary good news, but a historic moment as the $12.5 trillion U.S. pension market opens its doors to the world of cryptocurrencies. When ordinary people's retirement money formally marries blockchain assets, a reconstruction of capital order is unfolding before my eyes.

Policy nuclear explosion, the prelude to the return of the bull market.

The market expresses ecstasy in its most primitive way.
Bitcoin takes a breather after breaking through $117,000, while Ethereum surges 5% to over $3,800, and numerous altcoins like Solana and Dogecoin go on a collective rampage. Exchange data shows that shorts liquidated $261 million within 24 hours, with 90,000 investors losing everything overnight—carnival and slaughter are indeed the twin flowers of a bull market.

The essence of this executive order is to breach the boundary of 'safe assets' that has been in place for half a century. Since the implementation of the Employee Retirement Income Security Act in 1974, the retirement money of tens of millions of American workers has been confined within the fences of stocks, bonds, and mutual funds. And now, Trump is using an executive order to force the Department of Labor to reevaluate investment guidelines, dismantling barriers for cryptocurrencies, private equity, real estate, and other alternative assets.

When I calculate the scale of funds, the numbers are overwhelming. The 401(k) accounts currently hold about $8.7 trillion, and the total size of employer-sponsored retirement plans reaches $12.5 trillion—equivalent to the market value of 3.5 Apple Inc. or 7 times the total market value of Bitcoin. Analysis agency Dragonfly estimates that even if only 1% of the funds are allocated to cryptocurrencies, it would bring an additional liquidity of $125 billion, nearly 5% of the current total market value of cryptocurrencies.

Political economy, the power game of crypto capital.

Undercurrents are stirring behind policies. Trump's crypto strategy is actually a precisely designed political and economic layout.

  • In March, establish a 'strategic Bitcoin reserve' by incorporating 200,000 bitcoins held by the government into the treasury.

  • In July, promote the passage of the (Genius Act) through the House to establish a federal regulatory framework for stablecoins.

  • Appoint former PayPal COO David Sacks as the 'White House Artificial Intelligence and Cryptocurrency Czar', stating that 'USD stablecoins could create trillions in demand for government bonds.'

More intriguing is the chain of interests. According to the Bloomberg Billionaires Index, the cryptocurrency projects launched by the Trump family have recently increased their net worth by at least $620 million. Projects led by his children, such as World Liberty Financial and American Bitcoin, have a subtle temporal correlation with the policy shift. When regulatory capture of risk coincides with the growth of the president's family wealth, can the rights of ordinary retirement savers be guaranteed?

A new era for the market, institutional torrents reshape the ecology.

The traditional capital machine has long been roaring to life. BlackRock announced plans to launch a target date 401(k) fund in 2026, with 5%-20% of assets allocated to private markets; Fidelity has allowed retirement accounts to allocate to cryptocurrencies; the second-largest U.S. retirement plan service provider, Empower, announced partnerships with institutions like Apollo to introduce private assets. Wall Street's instincts always move half a step ahead of the market.

Transformation is exploding simultaneously across three dimensions:

  • Product innovation: Hybrid retirement products package complex alternative assets into 'one-click allocation' options, with BlackRock's target date funds serving as a model.

  • Channel integration: JPMorgan collaborates with Coinbase to enable credit card point redemption for USDC on the Base chain, as the century-old wall between traditional finance and the crypto world crumbles.

  • Service reconstruction: The demand for due diligence services focused on alternative assets is surging, giving rise to a new professional service track.

Ethereum's surge reveals a deeper logic. When long-term capital like pensions enters the market, the tokenization of RWA (Real World Assets) is propelled by nuclear power. The explosion of demand for on-chain real estate, government bonds, and commodities upgrades ETH from a mere smart contract platform to a settlement layer for trillion-dollar tangible assets. Meanwhile, high-performance public chains like Solana, with their low fee advantages, may capture more share of altcoins allocated by pensions.

Risk reefs, cold thoughts amidst the carnival.

The questioning voices are equally sharp. Johns Hopkins University professor Jeffrey Hook warns: 'Private assets have poor liquidity and high costs, and the long-term returns are highly uncertain compared to the stock market.' Moody's analysts are concerned that a massive influx of funds into low liquidity assets in the short term could sow systemic risks.

The specific risk dimensions are alarming:

  • Volatility trap: Bitcoin's amplitude exceeds 60% this year, fundamentally conflicting with the preservation needs of pensions.

  • Liquidity black hole: If savers concentrate their redemptions during an economic recession, private asset fire sales could trigger a chain reaction.

  • Fee erosion: The fee structure of private equity funds is 2% management fee + 20% profit sharing, which compared to an index fund with a 0.03% rate could consume nearly half of the returns over 30 years.

Regulatory loopholes hang like the sword of Damocles. The (Genius Act) exemptions for small-scale stablecoin issuers may trigger regulatory arbitrage; the design allowing commercial paper as reserve assets could replicate the shadow banking risk model of 2008. When the state-level regulatory puzzle conflicts with the new federal policy, the retirement money of ordinary teachers and truck drivers may become the cost of policy experimentation.

A new order of capital has arrived in the pendulum movement. As I watched Bitcoin oscillate around the $117,000 mark in the early morning, CryptoQuant data showed the bull market sentiment index had dropped from 80 to 60—signaling a technical cooling period for the market. However, the Fed's expectation of a rate cut in September is rising, and the long-term demand for pension allocations has not yet been fully priced in, with new funds lurking outside.

The $620 million increase in the Trump family's crypto wealth starkly contrasts with the Bitcoin allocation in retired teachers' accounts. Where will this experiment ultimately lead? The answer may be hidden in the product prospectus of BlackRock's hybrid funds, in the transaction flow of Ethereum's RWA protocol, and more deeply in the digital faith of millions of ordinary Americans voting with their retirement money.

History never repeats its rhymes, but capital always chases liquidity.
When the roar of the $12.5 trillion gate opening spreads across Wall Street, I know that the K-line surging tonight is merely a shallow shadow cast by the new era.