Bitcoin News Today: Trump Executive Order Paves Way for Crypto and Private Equity in 401(k)s

President Donald Trump has signed an executive order that will permit the inclusion of alternative assets—such as cryptocurrency, private equity, and real estate—into 401(k) retirement plans. The directive instructs the U.S. Department of Labor to revise guidance for fund managers, enabling the integration of these investments into retirement accounts. This development represents a notable shift in retirement investment policy and revives a similar initiative Trump had attempted during his first term, which was later undone by President Joe Biden [1]. The new policy aims to expand retirement options, potentially allowing savers to allocate funds into higher-risk, higher-return assets [4].

The executive order also mandates collaboration among the Department of Labor, the Treasury Department, and the Securities and Exchange Commission to harmonize regulatory approaches for including these assets in retirement plans. This is expected to streamline the process for administrators and encourage broader adoption of alternative investments [3].

The announcement triggered a positive reaction in financial markets. Bitcoin surged over 2% to exceed $116,000, while Ethereum climbed more than 7% to approximately $3,800. The overall value of cryptocurrencies rose nearly 2% to $3.9 trillion, reflecting growing optimism in the market [5]. Analysts suggest that the inclusion of crypto in 401(k) plans could create a new, sustained source of demand for digital assets, particularly as plan participants often maintain target allocations through systematic rebalancing [7].

The U.S. 401(k) market holds $8.7 trillion in assets as of the first quarter of 2025, according to the Investment Company Institute [8]. While the inclusion of alternative assets could diversify retirement portfolios and offer long-term growth potential, it also introduces greater complexity and risk due to the illiquid nature of such investments [9]. This policy change could further institutionalize the role of digital assets in mainstream finance.

Experts from both traditional financial firms and crypto market makers have weighed in. Ryan Rasmussen, head of research at Bitwise, noted that the change creates a new channel for sustained, long-term demand for Bitcoin [10]. James Butterfill from CoinShares added that the policy effectively opens the door for retirement investors to access cryptocurrencies [11]. OTC trader Jake Ostrovskis highlighted that 401(k) participants maintain systematic rebalancing strategies, which could generate predictable demand flows for alternative assets [12].

The shift reflects an ongoing debate about the role of alternative investments in retirement planning. While some argue that the inclusion of riskier assets could undermine the stability of retirement savings, others see it as necessary for diversification and growth in an environment marked by low interest rates and high inflation. As the Department of Labor works to implement the new guidance, investors and regulators will closely monitor how the policy evolves and its impact on the broader financial landscape.

Source:

[1] Reuters (https://www.reuters.com/business/finance/trump-sign-order-opening-way-alternative-assets-401ks-official-says-2025-08-07/)

[2] Newsweek (https://www.newsweek.com/donald-trump-changing-401-k-what-know-2110251)

[3] CNBC (https://www.cnbc.com/2025/08/07/trump-private-assets-retirement-plans.html)

[4] Newsweek (https://www.newsweek.com/trumps-latest-executive-orders-live-updates-president-sign-new-directives-law-2110273)

[5] Fortune (https://fortune.com/crypto/2025/08/07/bitcoin-price-today-donald-trump-executive-order-401ks-alternative-assets/)

[6] Yahoo Finance (https://finance.yahoo.com/news/bitcoin-crypto-stocks-rally-ahead-of-trump-order-opening-401k-plans-to-alternative-assets-130149290.html)

[8] Investment Company Institute