U.S. Advances Crypto Inclusion in 401(k)s via Executive Order to Diversify Retirement Investments

The U.S. government is reportedly advancing plans to include cryptocurrencies and alternative assets in 401(k) retirement plans through an executive order, potentially reshaping retirement investment frameworks. While no official confirmation has been issued, the White House is drafting a directive that would remove regulatory barriers preventing such inclusions, aligning with broader efforts to modernize retirement strategies [1]. This shift could diversify investment options for savers and create growth opportunities for firms specializing in alternative assets, though challenges like liquidity risks and high fees remain critical concerns [3].

The U.S. Department of Labor (DOL) has already taken steps to normalize crypto in retirement accounts by rescinding its 2022 guidance that discouraged digital assets in 401(k)s [1]. This move follows a 2020 non-binding opinion letter that allowed private assets under specific conditions, signaling a more neutral regulatory stance. President Donald Trump’s anticipated executive order is expected to formalize this shift, addressing fiduciary concerns and offering legal clarity for employers seeking to integrate crypto into retirement plans [2]. Such guidance could accelerate adoption, particularly as major asset managers like Apollo and BlackRock pilot managed crypto solutions within defined-contribution plans [3].

Market observers note that while the regulatory environment is evolving, practical implementation remains cautious. As of mid-2025, only five employers had adopted private market offerings with crypto allocations, typically ranging between 5% and 20% of portfolios [3]. Analysts like Jason Kephart of Morningstar caution that demand from both employers and individual investors is still limited, highlighting the gap between regulatory progress and market readiness [3]. Fidelity’s 2022 attempt to introduce Bitcoin into 401(k)s faced regulatory scrutiny and failed to gain traction, underscoring the complexity of integrating crypto into retirement systems [3].

Bitcoin’s recent performance—trading at $117,307.77 with a 23.35% rise over three months—suggests growing institutional interest, though its 1.54% decline in the past 24 hours reflects ongoing volatility [3]. The Coincu research team notes that confirmed regulatory approval could drive capital inflows into digital assets, potentially accelerating infrastructure development in the crypto sector [3]. However, critics argue that crypto’s speculative nature conflicts with the risk profiles of typical 401(k) participants, many of whom lack financial literacy to manage volatile assets [1].

The DOL’s updated stance and Trump’s executive order could catalyze broader adoption, but operational hurdles persist. Private equity and crypto investments often carry higher fees—up to 20% carried interest—compared to traditional public market funds [3]. Additionally, illiquidity and limited transparency in crypto markets pose risks for retirees, particularly in emergency scenarios requiring quick access to funds. Apollo’s managed liquidity model, blending private assets with a 10% crypto allocation, exemplifies an innovative approach but highlights the need for scalable solutions [3].

Consumer sentiment reflects a cautious optimism. Surveys indicate 79% of retirement plan participants support access to institutional-grade investments, yet many remain skeptical about crypto’s risks [3]. The SEC’s Office of the Investor Advocate has emphasized the need for safeguards against fraud and liquidity issues in private assets, reinforcing the importance of fiduciary responsibilities [3]. For mainstream investors, experts recommend starting with small allocations, prioritizing transparency, and maintaining liquid reserves to mitigate crypto’s volatility.

While the future of crypto in retirement plans remains uncertain, the momentum for integration is evident. The coming years will determine whether this shift proves sustainable or overreaches. For now, the industry is navigating a delicate balance between innovation and prudence, with regulatory clarity and operational adjustments likely to shape the outcome.

Sources: [1] [Benefits Catch-Up - Q2 2025](https://www.eversheds-sutherland.com/en/united-states/insights/benefits-catch-up-q2-2025) [2] [Wealth Managers Weigh in on Trump's Potential Order](https://www.investmentnews.com/retirement-planning/wealth-managers-weigh-in-on-trumps-potential-order-to-open-401k-plans-to-alternatives/261435) [3] [Should Mainstream Investors Add Private Market Exposure](https://www.ainvest.com/news/mainstream-investors-add-private-market-exposure-401-portfolios-assessing-risks-rewards-structural-readiness-2507/)