Trump will sign the executive order today: $12 trillion in pension funds could be invested in Bitcoin
President Donald Trump has scheduled to sign an executive order on Thursday, August 7, allowing 401(k) pension plans to include private equity, real estate, and cryptocurrencies, among other similar assets.
The order will direct the U.S. Department of Labor to review and potentially revise existing guidance on including alternative investments in pension plans regulated by the Employee Retirement Income Security Act of 1974 (ERISA), according to Bloomberg.
Additionally, the department will also need to clarify how fiduciary duties apply when asset allocation funds offer access to newly included assets.
What does Trump's new order regarding 401(k) mean?
This move is most beneficial for alternative asset firms, providing them access to a new $12 trillion pension fund market and helping their investment products reach the mainstream.
Of course, the cryptocurrency market as a whole is likely to feel the effects of the new order. For instance, Bitcoin (BTC) rose from $114,900 to $115,670 within an hour after the announcement.
Although cryptocurrency is still significantly below the psychological threshold of $120,000, the rise has sparked much speculation, leading to a jump in open futures contracts (+1.25% in the last hour at the time of writing based on CoinGlass data).
However, it is unclear whether the executive order will lead to immediate changes, as government agencies will still need to develop new regulations, which could take until 2026, according to Jarrett Sieberg, a financial services policy analyst at TD Cowen Washington Research Group.
Similarly, after regulations are laid out, sponsors of workplace pension plans will need to conduct extensive research and reorganization before offering new investment options.