Trump signs order allowing crypto investment in 401(k) retirement accounts, potentially $12.5 trillion impact.

Trump signs order allowing crypto investment in 401(k) retirement accounts, potentially $12.5 trillion impact.

President Donald Trump has signed an executive order allowing alternative assets, including Bitcoin and Ethereum, to be invested in 401(k) retirement accounts. This move is expected to channel billions of dollars into the cryptocurrency market, potentially impacting the market significantly.

The executive order directs the U.S. Secretary of Labor to review fiduciary guidance on private market investments in 401(k) and other defined contribution plans. This change could lead to a stable price floor for cryptocurrencies, as regular contributions to 401(k) accounts may help stabilize their prices [1].

Analysts predict that the new order could lead to a significant influx of capital into digital assets. According to Tom Dunleavy, Head of Venture at Varys Capital, the consistent inflow from 401(k) contributions could create a stable price floor for cryptocurrencies, leading to a more predictable market environment [1].

The executive order could channel billions into the crypto market. For instance, if 1% of 401(k) assets are allocated to cryptocurrencies, it could bring in $125 billion. If 3% are allocated, it could bring in $375 billion, and if 5% are allocated, it could bring in $625 billion [1].

The inclusion of cryptocurrencies in 401(k) accounts signals a growing acceptance of digital assets. This regulatory change could also benefit other cryptocurrencies as ETFs become available in the future [1].

The executive order marks a major victory for private asset managers, who have pushed for greater adoption of alternative assets in defined contribution plans under Trump's second term in office. It also brings with it new risks for investors, as private market assets have traditionally been excluded from 401(k)s due to their high fees, lack of transparency, and longer lockup periods [2].

The order is part of a broader trend towards embracing diverse investment vehicles in modern retirement planning. It aims to empower individuals with more choices, helping them build a robust and resilient retirement fund [3].

The long-term effects of the Trump 401(k) executive order are still unfolding. As the Labor Department re-evaluates its guidance, it is crucial for investors to stay informed about the updated regulations and their implications for their 401(k) plans. Always conduct thorough research before making any investment decisions, especially concerning new asset classes.

References:
[1] https://en.coinotag.com/trumps-executive-order-may-enable-bitcoin-and-ethereum-in-401k-accounts-potentially-boosting-crypto-investments/
[2] https://www.cnbc.com/2025/08/07/trump-order-will-allow-alternative-assets-like-cryptocurrencies-private-equity-in-401ks.html
[3] https://bitcoinworld.co.in/cryptocurrency-401k-order-impact/