Bitcoin News Today: U.S. Executive Order Allows 401(k) Investments in Crypto and Private Assets

On August 7, 2025, the White House issued an executive order titled “Democratizing Access to Alternative Assets for 401(k) Investors,” marking a historic shift in U.S. retirement savings policy by allowing investors to allocate a portion of their 401(k) accounts to digital assets like cryptocurrency, private equity, and real estate [2]. For the first time, everyday American workers will have the opportunity to include alternative investments in their employer-sponsored retirement plans, which collectively manage nearly $9 trillion [9].

The order mandates that the Department of Labor, in coordination with the Treasury and the Securities and Exchange Commission (SEC), develop a regulatory framework to support the integration of these assets into retirement accounts. This includes revisiting existing fiduciary guidance under the Employee Retirement Income Security Act (ERISA) and establishing clear rules for plan sponsors to offer alternative investments without excessive legal risk [2]. The Secretary of Labor has been tasked with reviewing past guidance, including the 2021 Supplemental Private Equity Statement, and is expected to propose updated standards within 180 days [2].

The move is expected to significantly expand the pool of potential crypto investors, potentially reaching more than 90 million Americans who participate in 401(k) plans [2]. While the executive order does not set a specific timeline for implementation, it signals the administration’s intent to reduce regulatory barriers and foster broader access to alternative investments. The SEC and the Department of Labor will collaborate to evaluate and possibly revise definitions of accredited investors and qualified purchasers, which could further expand participation in private and digital asset offerings [2].

The market has already responded positively to the news. Bitcoin surged above $122,000, and Ether hit $4,300—its highest level since December 2021 [4]. Analysts suggest that the anticipated inclusion of crypto in retirement accounts has contributed to the upward momentum, with Augustine Fan of SignalPlus noting that the directive from the Trump administration has played a key role in the recent rally [5]. Meanwhile, spot bitcoin exchange-traded funds have seen a $253 million net inflow in the past week [7].

However, the inclusion of volatile and less liquid assets like cryptocurrency in retirement portfolios comes with significant risks. Experts warn that alternative investments may not be suitable for all long-term retirement strategies and emphasize the need for robust due diligence, allocation limits, and clear disclosures [6]. The order does not guarantee immediate changes, as the final shape of the regulations will depend heavily on the rulemaking process led by the Labor Department.

From a legal and regulatory standpoint, the executive order represents a major step toward mainstreaming digital assets within institutional finance. It aims to balance innovation with investor protection by reducing regulatory uncertainty and encouraging a more nuanced fiduciary approach to alternative assets [2]. The success of the initiative will depend on how effectively the agencies translate the executive directive into actionable, risk-managed guidelines.

Legal experts at Kelman PLLC highlight the significance of the order as a turning point in both retirement investing and digital asset regulation. They advise plan sponsors, asset managers, and fintech providers to prepare for the evolving landscape by developing compliant product offerings and participant education programs [2]. With a new frontier opening between digital assets and long-term savings, the financial industry is being challenged to adapt and innovate responsibly.

As the implementation process moves forward, investors are encouraged to remain cautious and seek professional advice before making changes to their retirement strategies. The broader implications for the market—especially in the context of upcoming macroeconomic reports such as the Consumer Price Index and Producer Price Index—could further influence the trajectory of this emerging investment landscape [8].

Source:

[1] Yahoo Finance - https://finance.yahoo.com/news/experts-advise-caution-in-adding-private-assets-like-crypto-to-153313520.html

[2] Kelman Law - https://kelman.law/executive-order-opens-crypto-for-401k-investors/

[4] The Block - https://www.theblock.co/post/366263/bitcoin-nears-122000-ether-hits-2021-high?utm_medium=rss&utm_source=rss

[5] Bitbo - https://bitbo.io/news/bitcoin-trump-401k-order/

[6] MSN - https://www.msn.com/en-us/money/savingandinvesting/trump-s-crypto-401k-executive-order-risks-of-saving-for-retirement-in-alternative-assets-and-who-stands-to-benefit-most/ar-AA1Kedeq