- Trump signed an order enabling crypto and private equity in 401(k) plans, reversing previous restrictions.
- Bitcoin price spiked as the news broke, showing immediate market impact.
- Critics warn of risks including volatility, fees, and potential lawsuits over fiduciary duties.
American retirement savers may soon be able to add cryptocurrency to their 401(k)s. President Donald Trump is expected to sign an executive order today directing regulators to open the door for alternative assets in the nation’s largest retirement plans, according to a White House official.
What Would Trump’s Order Actually Do?
The expected executive order would tackle the issue on two fronts. First, it would instruct the Labor Department to team up with the SEC and Treasury to review regulations that have historically kept complex assets out of 401(k)s.
Second, the executive action reverses Biden-era guidance that discouraged including cryptocurrencies in defined-contribution plans—restoring a neutral stance toward digital assets.
Allowing crypto into retirement accounts could reshape its legitimacy. As one Reddit user observed:
“When something becomes eligible inside a 401(k), it gains legitimacy. People … may now consider it just because it is part of their retirement plan.”
Indeed, automatic, recurring contributions into crypto could drive significant inflows. Analysts anticipate that even modest allocation shifts might dramatically boost demand for digital assets. As an immediate reaction to the news, the price of Bitcoin jumped from about $114,900 to $116,409.
Critics Warn of “Profound” Risks to Retirees
Despite optimism, the inclusion of crypto brings concerns. Critics caution that retirement plans could face higher volatility, illiquidity, elevated fees, and valuation challenges.
Furthermore, some private equity firms fear being tainted by crypto’s reputation. They worry that bundling crypto with private assets may provoke public backlash and regulatory complexities.
Senator Elizabeth Warren criticized the move, arguing that private funds—already expensive and risky—would harm retirees more than benefit them.
Don’t Expect Crypto in Your 401(k) Tomorrow
Don’t expect immediate changes, though. Even if the order is signed, the actual regulatory updates will take time. Experts estimate that final rules from the Labor Department may not arrive until 2026, with the rollout to individual retirement plans taking even longer. Early adoption would likely be limited to self-directed brokerage windows within larger plans.
This order aligns with broader efforts under Trump’s second term to mainstream crypto. He established a strategic Bitcoin reserve, appointed a crypto “czar,” and pushed other pro-crypto policies.
Tariffs Update: This isn’t the only market-moving order Trump has made. CoinEdition covered his latest policy shift on tariffs.
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