Trump Directs 401(k) Market to Include Crypto and Private Equity

President Donald Trump has announced a new executive order that will open the $12.5 trillion U.S. 401(k) market to investments in private equity, real estate, and crypto assets. The directive instructs federal regulators—including the Department of Labor, the Securities and Exchange Commission (SEC), and the Treasury Department—to revise existing guidance under the Employee Retirement Income Security Act (ERISA) and create new pathways for defined-contribution plans to include alternative assets [1].

The move is seen as a significant shift in retirement investment policy. While 401(k) plans have traditionally been limited to publicly traded equities and bonds, this directive aims to integrate alternative assets such as digital currencies into mainstream retirement products. It follows a series of regulatory rollbacks since early 2025, including the rescission of a 2022 Labor Department compliance bulletin that discouraged the inclusion of crypto in retirement plans [1].

Under the new framework, fiduciaries will no longer be subject to a more restrictive standard when evaluating crypto or private assets. Instead, they will be required to apply the same prudence standard to all investments, aligning with ERISA’s principles-based approach [1]. This shift is expected to lower legal barriers and encourage more plan administrators to include alternative assets in their offerings.

The administration’s broader crypto agenda has included the creation of a Strategic Bitcoin Reserve, the launch of “Crypto Week,” and the passage of the GENIUS Act, the first federal legislation to regulate stablecoins. David Sacks, a venture capitalist, has also been appointed as the White House’s crypto and AI czar, signaling a continued push for digital asset integration into national economic infrastructure [1].

Supporters of the policy argue that it expands the range of investment options available to retail savers, reflecting the growing role of private equity and crypto in modern capital markets. Critics, however, warn that the inclusion of high-fee, illiquid, or volatile assets could increase risk for less sophisticated investors. The success of the initiative will depend on how federal agencies implement the directive, particularly in defining custody, valuation, and disclosure requirements [1].

Major asset managers, including Blackstone, Apollo, and KKR, are expected to benefit from the new regulatory environment, having long lobbied for expanded access to retirement funds. At the same time, the SEC is anticipated to play a key role in facilitating crypto and private market asset access for participant-directed plans [1].

The Department of Labor has emphasized that it will work closely with regulatory partners to assess potential rule changes, ensuring that the new framework minimizes compliance risks for plan sponsors. While the directive does not eliminate fiduciary duties, it provides a more flexible legal environment for including alternative investments in retirement portfolios.

This executive action marks a continuation of Trump’s approach to financial policy, which includes a focus on fostering innovation in digital assets and private markets. It also reflects a broader philosophical shift in how retirement savings are managed, positioning the U.S. retirement system as a potential conduit for a wider array of modern capital instruments [1].

Source: [1] Trump opens $12.5 trillion 401(k) market to crypto and private equity access (https://cryptoslate.com/trump-opens-12-5-trillion-401k-market-to-crypto-and-private-equity-access/)