Trump Executive Order Allows Crypto in 401(k) Plans Expanding Retirement Investment Options

U.S. President Donald Trump signed an executive order on August 7, 2025, allowing American workers to include alternative assets, such as cryptocurrency, in their 401(k) retirement accounts. This move marks a significant step in the mainstream adoption of digital assets and expands investment options for millions of American employees who participate in employer-sponsored defined-contribution plans [1]. According to the Investment Company Institute, U.S. retirement assets totaled $43.4 trillion as of March 31, 2025 [1]. The executive order removes previous restrictions that prevented the inclusion of non-traditional assets like private equity and real estate in these plans, now extending the same flexibility to digital assets [1].

The change has been hailed as a milestone for the crypto industry. Petr Kozyakov, CEO of Mercuryo, emphasized that allowing Bitcoin in 401(k) portfolios reflects the growing recognition of digital assets as legitimate investments, providing everyday investors access to the same opportunities as institutional players [1]. Similarly, a Paxos spokesperson stated that the move could encourage a broader adoption of crypto, particularly through regulated platforms like Paxos [1]. Some analysts suggest that if just 1% of the roughly $9 trillion in 401(k) assets were allocated to crypto over two years, it could inject $90 billion into the market [1]. However, these figures represent speculative estimates based on analyst projections and not current data.

Despite the optimism, the inclusion of crypto in retirement accounts introduces new risks. Miles Fuller of Taxbit pointed out that while there was no legal barrier to including crypto in 401(k)s before the executive order, plan administrators had been hesitant due to the volatile nature of digital assets and the potential for fiduciary liability under the Employee Retirement Income Security Act (ERISA) [1]. The executive order itself appears to promote indirect investment in crypto through funds or vehicles that include crypto exposure rather than direct purchases [1]. This approach may reduce liability for administrators while still allowing employees to benefit from crypto’s potential growth.

Kyle Chassé of MV Global suggested that long-term strategies like dollar-cost averaging and portfolio diversification could help mitigate the volatility of crypto in retirement accounts [1]. However, he stressed that these strategies should be implemented with caution, particularly since 401(k) investments are designed for long-term growth and retirement savings. Q. Ghaemi of Swan Bitcoin noted that the implementation of crypto in 401(k) plans may take several months or even a year as regulators finalize guidance and plan providers develop compliant offerings [1]. Meanwhile, Miles Fuller anticipates quicker adoption, noting that the executive order signals regulatory support and could encourage early action by some administrators [1].

The long-term implications of this policy shift remain to be seen. The U.S. Department of Labor is expected to review and clarify regulatory frameworks over the next six months, which could influence the pace and scale of adoption [1]. The development of new investment vehicles, including crypto-based exchange-traded funds, may further expand options for 401(k) participants in the coming years [1].

Source: [1] President Trump Signs Order Letting Americans Add Crypto to 401(k) Plans – Here’s the Risk (https://cryptonews.com/news/trump-signs-order-crypto-401k-risk/)