Potential Bitcoin Surge Ahead as U.S. Executive Order Allows 401(k) Inclusion

President Trump's executive order allows Bitcoin to be included in 401(k) retirement plans, potentially driving billions in capital into the cryptocurrency and fueling speculation about its short-term price trajectory. Analysts predict a significant influx of capital, with some estimating a potential $122 billion if just 1% of 401(k) plans allocate funds to Bitcoin. The move could also lead to increased institutional involvement in the cryptocurrency market.

President Trump's executive order, signed on August 7, 2025, allows Bitcoin to be included in 401(k) retirement plans, potentially driving billions in capital into the cryptocurrency and fueling speculation about its short-term price trajectory. The move could also lead to increased institutional involvement in the cryptocurrency market.

Analysts predict a significant influx of capital, with some estimating a potential $122 billion if just 1% of 401(k) plans allocate funds to Bitcoin. The inclusion of cryptocurrency in US retirement plans could mark a milestone for Bitcoin adoption and unlock billions of dollars in new capital, potentially pushing the asset above $200,000 by the end of 2025, according to André Dragosch, the head of European research at crypto asset manager Bitwise [1].

The executive order directs the Department of Labor, the Treasury, and the Securities and Exchange Commission to clear the path for such assets to find a place alongside stocks and bonds. This could mean new options will be available within retirement accounts, though not right away. New kinds of funds have to be developed for the retail market, a process that's already underway [2].

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Fed policy, retirement plans seen as dual drivers
Based on Bitwise’s survey for financial advisers, most portfolio managers are more likely to recommend a 2.5% or 3% Bitcoin allocation for retirement plans, suggesting more significant inflows than the initial 1% allocation [1].

The first Bitcoin inflows from retirement plan managers may come as soon as this fall, coinciding with the first expected interest rate cut by the US Federal Reserve, which may drive Bitcoin to new highs, said Dragosch [1].

Markets are pricing in an 83% chance that the Fed will keep interest rates steady during the next Federal Open Market Committee meeting on Sept. 17, according to the latest estimates of the CME Group’s FedWatch tool [1].

Beyond improving monetary policy expectations, Bitcoin adoption may also be accelerated by the financial incentive of 401(k) plan providers to offer Bitcoin ETF exposure. BlackRock, Fidelity and Vanguard are among the largest retirement plan providers in the US. While Vanguard has yet to “greenlight” crypto ETFs, “BlackRock and Fidelity have a huge economic incentive to include these Bitcoin ETFs in their standard plans,” said Dragosch [1].

US spot Bitcoin ETF overview by market share. Source: Dune
BlackRock is the issuer of the largest Bitcoin ETF, the iShares Bitcoin Trust, with over $84 billion in assets under management, accounting for 57.5% of the total market share, while Fidelity’s ETF is the second-largest, holding $22.4 billion, accounting for 15.3% of the total market share, Dune data shows [1].

Last Friday, US Securities and Exchange Commission Chair Paul Atkins confirmed that the regulatory agency is working with the Trump administration to enable retail investors’ retirement plan access to private equity, including crypto assets, but urged the necessity of “proper guardrails” around alternative investments [1].

The U.S. financial landscape is undergoing a seismic shift. On August 7, 2025, President Donald J. Trump signed an executive order that could redefine retirement investing for millions of Americans—and, in the process, turbocharge the valuation of companies like MicroStrategy (MSTR). By allowing 401(k) plans to include cryptocurrencies and other alternative assets, the policy has unlocked a $12.5 trillion market, with $8.9 trillion in defined contribution plans [3].

MicroStrategy (MSTR), holding 3% of Bitcoin's supply, becomes a leveraged proxy as policy removes fiduciary barriers to crypto adoption in institutional portfolios. The company's $73B Bitcoin holdings and $10B Q2 net income from crypto gains position it to benefit from potential $90B in new 401(k) inflows, with analysts raising price targets to $700. However, MSTR's stretched valuation (1,200+ P/E) and leveraged structure expose it to risks: a 10% Bitcoin drop could erase $7.3B in value, while regulatory delays may slow adoption [3].

Including digital assets in retirement plans will enable 401(k) portfolio managers to invest in Bitcoin ETFs, which may push Bitcoin’s price to new all-time highs, flashing another optimistic signal for Bitwise’s $200,000 Bitcoin price target for the end of 2025 [1].

The executive order could mean new options will be available within your retirement account, though not right away. New kinds of funds have to be developed for the retail market, a process that's already underway, because 401(k) investors represent a huge new market for private equity firms and cryptocurrency companies [2].

Experts say these assets may not be well suited to everyone's 401k. Private equity firms charge really high fees: typically 2% as a management fee and 20% of the profit. And investors are locked in for long periods of time, which could be a decade or more. Things could get messy if you're planning to retire or switch jobs soon, and want to move your money around [2].

Jeff Hooke, senior finance lecturer at Johns Hopkins University, suggests sticking with the basics: stock and bond index funds. "You're protected from high fees and you're principally guaranteed to return what the market does, since the fees are going to be extremely low," he says [2].

With the S&P 500 repeatedly setting records this year, some investors might find that tracking the market is enough.

References:
[1] https://cointelegraph.com/news/401-k-crypto-retirement-plans-bitcoin-etf-analyst
[2] https://www.npr.org/2025/08/16/nx-s1-5504096/401k-private-equity-crypto-executive-order
[3] https://www.ainvest.com/news/401-reform-bitcoin-reserve-strategy-era-microstrategy-mstr-2508/