Crypto in 401(k) Plans Crypto Gets a Regulatory Boost
On Thursday, Aug. 7, Donald Trump signed an Executive Order that could change retirement investing forever — giving 401(k) investors access to alternative assets such as private equity, real estate, commodities, infrastructure financing, and crypto.
This marks a major shift from long-standing restrictions that kept most retirement plans locked into traditional securities like stocks and bonds.
DOL’s Cautious Stance on Crypto in 401(k) Plans
Why Crypto Faced Pushback in Retirement Accounts
While 401(k) crypto was never explicitly banned, the Department of Labor (DOL) in 2022 issued a warning urging fiduciaries to “exercise extreme care” before adding cryptocurrency options.
The DOL cited the SEC’s view at the time that crypto’s price volatility made it unsuitable for mainstream retirement investing, especially for those nearing retirement.
Fidelity and Crypto-Friendly Firms Lead the Way
Despite regulatory caution, some providers embraced the opportunity. Fidelity’s Digital Assets Account, for example, allows employers to offer Bitcoin in 401(k) plans, while companies like MicroStrategy — known for their pro-Bitcoin stance — have also paved the way.
However, broader adoption stalled due to government warnings and litigation risk.
Alternative Assets Now in the Spotlight
What Trump’s Order Changes
Trump’s Executive Order instructs the Secretary of Labor to re-examine DOL guidance on alternative assets in retirement accounts. The stated goal: to remove barriers and give American workers more tools for asset diversification and competitive returns.
The six categories named include:
- Private market investments
- Real estate exposure
- Commodities
- Infrastructure financing
- Lifetime income strategies
- Actively managed funds investing in digital assets
A Potential Boom for Bitcoin ETFs
Indirect Crypto Exposure Likely Favored
The order suggests 401(k) providers should focus on vehicles like Bitcoin ETFs rather than direct coin holdings. This aligns with moves by public pension funds in Wisconsin and Jersey City, which already hold Bitcoin ETFs.
If private-sector retirement accounts follow suit, 401(k) crypto adoption could see its biggest growth yet.
Key Takeaway
Trump’s Executive Order could transform retirement investing by opening the door to 401(k) crypto and other high-return alternatives — but for most investors, exposure will likely come through ETFs, not direct holdings.
The Growing Debate Over Crypto in 401(k) Plans
The inclusion of crypto in 401(k) plans has been one of the most debated topics in retirement investing over the past few years. Proponents argue that cryptocurrency offers diversification benefits and the potential for outsized returns — especially compared to low-yield bonds and overvalued equities. Critics, however, point to its notorious volatility, regulatory uncertainty, and the risk of significant losses for inexperienced investors.
Before Trump’s Executive Order, the Department of Labor’s 2022 guidance served as a major deterrent for most plan providers. Their warning emphasized that fiduciaries could face legal consequences if crypto losses were deemed to harm retirement savers. This cautious stance meant that crypto in 401(k) plans remained rare, offered only by a handful of progressive providers willing to test the waters.
Now, with the new directive for the DOL to “re-examine” its position, the playing field could change dramatically. This doesn’t mean every employer will suddenly offer Bitcoin or Ethereum options. Instead, it is likely that large asset managers will create regulated investment vehicles — like diversified crypto ETFs or blockchain-focused funds — to give workers safer exposure to the asset class.
For younger investors, the inclusion of crypto in 401(k) plans could be a game-changer. With decades before retirement, they can better weather the volatility in exchange for potentially higher long-term returns. However, financial advisors caution that crypto should still represent only a small portion of a well-balanced portfolio.
Trump’s move effectively opens the conversation again, giving Americans more control over their retirement assets. Whether this leads to widespread adoption or remains a niche option will depend on how the market, regulators, and employers respond in the coming months. One thing is certain: crypto in 401(k) plans is no longer just a futuristic idea — it’s becoming a present-day possibility.