Bitcoin News Today: Trump executive order may allow Bitcoin in 401(k) plans shifting retirement investment trends

President Donald Trump is set to sign an executive order that could radically transform the U.S. retirement landscape by potentially allowing cryptocurrencies like Bitcoin to be included in 401(k) plans. The order, which aligns with his broader pro-crypto strategy, aims to open the $9 trillion retirement market to digital assets, signaling a shift toward mainstream acceptance of cryptocurrencies as a legitimate investment class.

The executive order is expected to task Washington regulatory agencies with exploring the feasibility of including crypto in retirement accounts and identifying existing barriers. It also directs the U.S. Department of Labor to revise current rules that limit 401(k) investments to traditional assets such as stocks, bonds, and mutual funds. The move is designed to offer legal protection to 401(k) providers, encouraging them to introduce crypto investment options without fear of liability [1].

Previously, in May, the Trump administration reversed a Biden-era policy that discouraged 401(k) providers from offering crypto investment options. This change laid the groundwork for the current executive order and demonstrated the administration’s intent to support the integration of digital assets into retirement planning [1].

If the order is finalized, Americans could begin allocating portions of their 401(k) savings to Bitcoin or other cryptocurrencies, potentially through products like Bitcoin ETFs or managed portfolios that include digital assets. This would enable investors to take advantage of dollar-cost averaging without the need for a separate crypto exchange account, streamlining the process of incorporating crypto into long-term financial planning [1].

Major asset managers, including BlackRock and Apollo, have reportedly been preparing for this regulatory shift by developing crypto-related retirement products [1]. The move reflects a growing recognition of Bitcoin as a store of value, often referred to as “digital gold,” and highlights its potential role in diversified portfolios.

While the executive order sets the stage for this change, it is unlikely that 401(k) plans will immediately include Bitcoin. Financial providers are expected to proceed cautiously, particularly given the volatility of crypto assets. However, the regulatory shift sends a clear message that digital assets are being integrated into the broader financial ecosystem [1].

For individuals interested in adding Bitcoin to their 401(k), the process will likely involve checking with their employer or plan provider to confirm whether crypto options are available. Once accessible, investors can review the available products, decide on an allocation, and begin investing. It is generally advised to start with a small allocation due to the inherent volatility of crypto [1].

According to a VanEck study, allocating up to 6% of a traditional 60/40 portfolio to crypto can enhance risk-adjusted returns, with more risk-tolerant investors potentially benefitting from allocations as high as 20% [1]. The order may also pave the way for potential tax benefits if a separate crypto tax-free law is passed, offering further incentives for investors.

The long-term implications of the executive order could reshape retirement planning in the U.S., potentially expanding the range of investment options available to millions of Americans. The introduction of crypto into retirement accounts reflects a broader trend of institutional and regulatory acceptance of digital assets as part of mainstream finance [1].

Source: [1] How Trump’s $9T executive order could let you add Bitcoin to your retirement plan (https://cointelegraph.com/news/how-trump-s-9t-executive-order-could-let-you-add-bitcoin-to-your-retirement-plan)