Trump Signs Executive Order Allowing Private Equity, Cryptocurrencies in 401(k)s

President Trump signed an executive order to allow private equity, cryptocurrencies, and alternative investments into 401(k)s, potentially giving workers more diversification options and higher returns. However, experts warn that the complexity and opacity of private equity may pose a risk to investors and education efforts are needed. The order directs the Department of Labor and Securities and Exchange Commission to revise regulations to facilitate investment in alternatives.

President Donald Trump signed an executive order on August 7, 2025, permitting 401(k) plans to include cryptocurrencies, private equity, and real estate as investment options for the first time. This directive aims to expand retirement investment access for over 90 million Americans by updating outdated regulatory barriers [1].

The order directs the U.S. Department of Labor, in coordination with the Treasury Department and the Securities and Exchange Commission (SEC), to revise existing regulatory frameworks that have historically discouraged the inclusion of alternative assets in 401(k) plans [2]. The SEC is tasked with revising guidance and removing legal barriers that have prevented fiduciaries from incorporating such assets due to concerns over litigation risks and regulatory overreach [3].

Critics warn of volatility risks associated with cryptocurrencies and private equity, while supporters highlight the potential for higher returns and economic growth [4]. Financial experts suggest that the inclusion of these high-risk assets in retirement accounts could lead to both innovation and challenges in the financial services sector [8]. Employers and plan administrators may be hesitant to adopt these changes without further clarity on risk management and fiduciary responsibilities [8].

While the executive order does not immediately alter how individuals invest in their retirement accounts, it sets the stage for future regulatory actions and policy updates that will determine how these new options are implemented [9]. The Department of Labor has already rescinded previous guidance on digital assets, signaling a shift in regulatory approach under the Trump administration [7].

Several firms have taken steps to put out investment products that include alternative assets in anticipation of the Trump administration's planned move. Apollo Global Management and State Street have released a target-date fund that includes a private-markets component, while Blue Owl Capital indicated this week it will collaborate with Voya on products that include private markets in 401(k) investments [2].

The long-term impact of the executive order will depend on how these new directives are interpreted and implemented by federal agencies and financial institutions [10]. As the regulatory landscape continues to evolve, education efforts will be crucial to ensure investors understand the risks and benefits of these new investment options.

References:
[1] https://www.ainvest.com/news/trump-executive-order-expands-401-investments-crypto-private-equity-2508/
[2] https://www.aol.com/trump-reportedly-plans-order-open-181939368.html
[3] https://www.reuters.com/business/finance/trump-signs-order-broadening-access-alternative-assets-401ks-2025-08-07/
[4] https://abcnews.go.com/Live/major-401k-trumps-new-crypto-private-equity-rules/story?id=124461859
[5] https://www.pbs.org/newshour/politics/trump-opens-door-for-401k-retirement-plans-to-invest-in-private-equity-and-crypto
[6] https://www.theguardian.com/us-news/2025/aug/07/trump-executive-order-cryptocurrency
[7] https://www.wsj.com/finance/regulation/trump-shakes-up-wall-street-with-orders-on-401-k-s-debanking-82d457ba?gaa_at=eafs&gaa_n=ASWzDAh8hLzitI1BqqfUOexSfyK3cqaET9llUiNi_WVOKfuai2Mi8rbFUXhF&gaa_sig=5CG8gydjCG1U1BxzJHQg59_FVn8xKdcceCGW84p6GCTgfWvkVIG7ZcoYBcrrKc3q5LlHzbN0nTip7f4fb2NmYQ%3D%3D&gaa_ts=689545d7
[8] https://finance.yahoo.com/news/experts-advise-caution-in-adding-private-assets-like-crypto-to-401ks-153313520.html
[9] https://www.investors.com/news/bitcoin-price-cryptocurrency-trump-401k-plans/
[10] https://www.newsweek.com/trumps-latest-executive-orders-live-updates-president-sign-new-directives-law-2110273