Bitcoin and Crypto Rally as Trump Opens 401(k) Door to Digital Assets

Crypto markets rallied 5.3% in the past 24 hours, with Bitcoin up 1.3% to $116,500, following President Trump's executive order opening 401(k) retirement plans to a broader range of investments, including cryptocurrencies. The move is expected to unlock $8.7 trillion in assets under management and create sustained demand flows for digital assets. Ethereum's price surged 4.6% to near $3,900, while gold rose on tariffs being imposed on bullion bars. Investors are bracing for July's inflation report, which may influence the odds of a dovish Fed interest-rate cut in September.

President Donald Trump's recent executive order has significantly expanded the investment options for Americans' 401(k) retirement savings. The order, signed on Thursday, allows for investments in cryptocurrencies, private equity, and real estate, marking a substantial shift in retirement investment opportunities [1].

The move is expected to unlock approximately $8.7 trillion in assets under management, potentially creating sustained demand flows for digital assets. The Securities and Exchange Commission (SEC), Labor Department, and Treasury are directed to update their rules to accommodate these alternative assets [1].

While the new executive order could provide investors with more diversification options, it also raises concerns about the potential risks to retirement savings. Ted Rossman, senior industry analyst at Bankrate, cautioned that the implementation could be slow, with many providers reluctant to adopt these new investment options due to potential costs and legal uncertainties [1].

Crypto markets have responded positively to the news, with Bitcoin rising 1.3% to $116,500 and Ethereum surging 4.6% to near $3,900 in the past 24 hours. The rally follows the executive order, indicating investor optimism about the integration of cryptocurrencies into retirement plans [2].

The executive order could revolutionize the $9 trillion US retirement market by allowing Bitcoin and other cryptocurrencies in 401(k) plans. Major asset managers like BlackRock are already preparing for this regulatory shift, developing crypto retirement products in anticipation of the changes [2].

Investors are also bracing for July's inflation report, which may influence the Federal Reserve's decision on interest rate cuts in September. The combined impact of Trump's executive order and the potential Fed action leaves both the investment and retail sectors adjusting to a new economic landscape [1].

References:
[1] https://abcnews.go.com/Live/major-401k-trumps-new-crypto-private-equity-rules/story?id=124461859
[2] https://en.coinotag.com/trumps-executive-order-may-pave-the-way-for-bitcoin-in-401k-retirement-plans/