Trump signed executive order allowing crypto in 401ks, a major milestone for the industry.

Trump signed executive order allowing crypto in 401ks, a major milestone for the industry.

President Trump signed an executive order on Thursday, August 7, 2025, that could revolutionize the retirement investment landscape for millions of Americans. The order permits 401(k) plans to include cryptocurrencies, private equity, and real estate as investment options for the first time, opening the door for over 90 million participants in defined-contribution plans to access previously reserved asset classes [2].

The directive aims to expand retirement investment choices by updating outdated regulatory barriers, fostering innovation in financial services, and promoting economic growth [6]. Federal agencies, including the Department of Labor, Treasury Department, and the Securities and Exchange Commission (SEC), are directed to reassess and update existing regulatory frameworks to integrate these alternative assets into mainstream finance [2].

The inclusion of cryptocurrencies in 401(k) plans is a significant milestone for the industry, which has long sought mainstream acceptance. Bitcoin, for instance, has generally moved upward since its creation nearly two decades ago, despite its volatility [3]. The price of bitcoin was up 2% on Thursday to $116,542 and has nearly doubled since Trump was elected [1].

Private equity firms also stand to benefit from the executive order, as they have long desired access to retirement assets. The $5 trillion industry, which invests in private businesses rather than publicly traded stocks, has for decades wanted to compete for a role in retirement plans [1].

However, the move has drawn mixed reactions. While some welcome the potential for higher returns and diversification, others caution against the risks associated with volatile assets like cryptocurrencies and private equity. Critics warn of volatility risks, while supporters highlight potential for higher returns and economic growth [4].

The executive order does not immediately change how individuals invest in their retirement accounts, but it sets the stage for future regulatory actions and policy updates that will determine how these new options are implemented [9]. The Department of Labor has already rescinded previous guidance on digital assets, signaling a shift in regulatory approach under the Trump administration [7].

As the regulatory landscape continues to evolve, the long-term impact of the executive order will depend on how these new directives are interpreted and implemented by federal agencies and financial institutions [10]. Employers and plan administrators may be hesitant to adopt these changes without further clarity on risk management and fiduciary responsibilities [8].

References:
[1] https://www.cbsnews.com/news/trump-401k-changes-cryptocurrencies-private-equity-executive-order/
[2] https://www.ainvest.com/news/trump-executive-order-expands-401-investments-crypto-private-equity-2508/
[3] https://www.reuters.com/business/finance/trump-signs-order-broadening-access-alternative-assets-401ks-2025-08-07/
[4] https://abcnews.go.com/Live/major-401k-trumps-new-crypto-private-equity-rules/story?id=124461859
[5] https://www.pbs.org/newshour/politics/trump-opens-door-for-401k-retirement-plans-to-invest-in-private-equity-and-crypto
[6] https://www.theguardian.com/us-news/2025/aug/07/trump-executive-order-cryptocurrency
[7] https://www.wsj.com/finance/regulation/trump-shakes-up-wall-street-with-orders-on-401-k-s-debanking-82d457ba?gaa_at=eafs&gaa_n=ASWzDAh8hLzitI1BqqfUOexSfyK3cqaET9llUiNi_WVOKfuai2Mi8rbFUXhF&gaa_sig=5CG8gydjCG1U1BxzJHQg59_FVn8xKdcceCGW84p6GCTgfWvkVIG7ZcoYBcrrKc3q5LlHzbN0nTip7f4fb2NmYQ%3D%3D&gaa_ts=689545d7
[8] https://finance.yahoo.com/news/experts-advise-caution-in-adding-private-assets-like-crypto-to-401ks-153313520.html
[9] https://www.investors.com/news/bitcoin-price-cryptocurrency-trump-401k-plans/
[10] https://www.investors.com/news/trump-opens-door-for-401k-retirement-plans-to-invest-in-private-equity-and-crypto