Bitcoin News Today: Crypto in 401(k)s: Democratizing Access or Risky Gamble?

A U.S. congressman has introduced legislation to codify President Donald Trump's August 2025 executive order, which paves the way for Americans to include cryptocurrencies and other alternative assets in their 401(k) retirement plans. The Retirement Investment Choice Act, led by Rep. Troy Downing (R-AL), seeks to transform the non-binding directive into permanent law, ensuring long-term stability for the inclusion of digital assets in workplace retirement accounts, according to a CryptoTimes report.

The executive order, titled Democratizing Access to Alternative Investments for America's Workers, mandates federal regulators like the Securities and Exchange Commission (SEC) and the Department of Labor (DOL) to streamline rules for 401(k) plans to offer investments such as Bitcoin, private equity, and real estate, according to a Morgan Lewis analysis. This shift reverses earlier caution from the Biden administration, which in 2022 warned fiduciaries to approach crypto with "extreme care" due to volatility and custody risks, as noted in an AJG briefing. The DOL rescinded that guidance in May 2025, adopting a "facts and circumstances" standard that allows plan sponsors to evaluate crypto as they would any other investment, according to AJG.

Supporters argue the move democratizes finance, giving everyday investors access to asset classes previously reserved for institutional players. "This is about modernizing retirement savings to reflect today's economy," said Downing, who was joined by 10 Republican colleagues in sponsoring the bill, according to CryptoTimes. The American Securities Association praised the proposal as a step toward "expanding investment opportunities for every American retirement saver," the CryptoTimes piece reported.

Meanwhile, states like Michigan and Wisconsin have already experimented with crypto in public pension funds. Michigan's Retirement System reported $74 million in Bitcoin and Ethereum ETFs as of September 2025, though the holdings represent less than 1% of its $115 billion portfolio, according to a USA Today report. Critics, however, warn that crypto's volatility and regulatory uncertainty pose risks for average workers. Alicia Munnell, a prominent retirement expert, called Bitcoin in 401(k)s a "terrible idea," citing its speculative nature and lack of long-term return data, according to RPA Insights.

The DOL and SEC are expected to issue safe-harbor guidance within 180 days of the executive order, the Morgan Lewis analysis noted. This framework would help employers navigate the complexities of adding crypto to retirement plans, including valuation challenges and cybersecurity risks, according to an Alera Group report. Proponents like crypto advocate Elizabeth Hansson of Stand with Crypto Michigan note that adoption will take time but predict "some employers-especially those with younger, tech-savvy workforces-will move quickly" once the rules solidify, USA Today reported.

For now, the market is already reacting. Bitcoin hit an all-time high of $124,457 in late August 2025 amid speculation that a potential second Trump administration would foster a pro-crypto regulatory environment, USA Today reported. Yet, skeptics caution that past crypto crashes-such as Bitcoin's 84% plunge from 2017 to 2018-highlight the asset's inherent risks, USA Today noted.

As the debate unfolds, the legislation faces hurdles. The House Financial Services Committee must approve the bill, and regulatory agencies must finalize the rules. For now, the DOL's neutral stance and the executive order provide a temporary green light, but lawmakers and investors alike are watching to see if the U.S. will fully embrace crypto as a retirement savings tool, according to AJG and the Morgan Lewis analysis.

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