Trump Executive Order Lets Crypto Into 401(k) Retirement Plans

Donald Trump has signed an executive order allowing cryptocurrencies, private equity, and real estate to be included in 401(k) retirement accounts. The move removes key regulatory hurdles that have kept these alternative assets out of most workplace retirement plans.

While crypto was never outright banned in 401(k)s, previous Department of Labor (DOL) guidance urged plan fiduciaries to use “extreme care” before adding it to investment menus. That guidance, issued in 2022, was rescinded in May. Trump’s order now directs the DOL to treat crypto like any other permitted investment category.

The $12 trillion U.S. defined contribution market could become a significant funding source for asset managers in the digital currency sector. Critics warn that introducing volatile, illiquid assets to retirement accounts could add unnecessary risk, especially for savers approaching retirement.

From Crypto Skeptic to Policy Supporter

Trump’s stance on crypto has shifted dramatically. Once calling Bitcoin “a scam,” he has since launched his own cryptocurrency venture, courted industry support, and pledged to make the U.S. the “crypto capital of the world.”

In the order, Trump said,

“My Administration will relieve the regulatory burdens and litigation risk that impede American workers’ retirement accounts from achieving the competitive returns and asset diversification necessary to secure a dignified, comfortable retirement.”

The order also includes provisions for private equity and real estate, broadening investment options for retirement plan providers.

How the Order Changes Retirement Investing

The change doesn’t force crypto into 401(k) plans, but it removes regulatory roadblocks. Wealth managers who previously avoided digital assets due to compliance concerns may now reconsider. This could direct new capital into:

• Spot cryptocurrencies such as Bitcoin and Ethereum
• Crypto-focused exchange-traded funds (ETFs)
• Private equity funds with blockchain exposure

Given the risk-averse nature of retirement investing, many managers may opt for ETFs over direct crypto holdings.

Crypto’s Market Context

The order comes as crypto assets post one of their strongest quarters in recent years. Bitcoin, now trading at around $116,880, is up 26% year-to-date and showing reduced volatility not seen since 2023. These trends have strengthened arguments that crypto markets are maturing, potentially making them more palatable for retirement portfolios.

Trump’s announcement came alongside another executive order addressing “debanking” — the practice of banks denying services based on political or business activities. While the crypto-related order focuses on retirement investing, the debanking directive also indirectly affects digital asset businesses, which have often struggled to secure banking relationships.

Investor Considerations Before Allocating Crypto in a 401(k)

Financial advisers caution that alternative assets like crypto, private equity, and real estate are less liquid than traditional stocks and bonds. Selling them quickly to cover unexpected expenses may not be possible.

Lisa A.K. Kirchenbauer, senior adviser and founder of Omega Wealth Management, recommends a cautious approach:

• Limit allocation to 5–10% of the portfolio initially
• Understand liquidity rules before investing
• Match investment horizon with asset characteristics

Kirchenbauer emphasized the principle of “own what you know,” urging investors not to buy assets they don’t understand.

Potential Impact on Portfolio Design

Some investment leaders see this as a step toward a new retirement portfolio model. BlackRock CEO Larry Fink has suggested a 50/30/20 portfolio split — 50% stocks, 30% bonds, 20% private assets — replacing the traditional 60/40 approach.

Fink has also argued that pensions outperform 401(k)s partly because pensions have long invested in private assets, while most 401(k) plans have not. Even a 0.5% annual performance difference can add up significantly over decades.

The Scale of the Retirement Market

The U.S. retirement market is worth about $43 trillion, with nearly $9 trillion in 401(k) plans. The global cryptocurrency market cap is just under $4 trillion. Widening access to crypto through workplace plans could pull significant new capital into the sector, further integrating it with mainstream finance.

Galaxy CEO Michael Novogratz called the move “a widening of the aperture” for crypto investing:

“When it becomes commonplace — when you can do it at the place you’ve already been doing business with, whether it’s Fidelity or T. Rowe Price — you just pull more people 

FAQs

1. Can I add Bitcoin to my 401(k) now?
   Not automatically. The order allows plan providers to offer crypto, but your specific 401(k) manager must choose to include it.

2. Is investing in crypto through a 401(k) risky?
   Yes. Crypto is volatile and less predictable than stocks or bonds. Financial advisers recommend limiting exposure to a small percentage of your portfolio.

3. Will ETFs be the main way crypto enters retirement accounts?
   Likely. ETFs provide exposure to crypto without requiring direct asset custody, which may be more appealing to retirement plan managers.

Conclusion

Trump’s executive order doesn’t guarantee cryptocurrencies will appear in every 401(k) plan. Instead, it removes regulatory barriers and grants retirement plan providers the option to include them. For crypto advocates, it’s a milestone toward mainstream adoption. For investors, it’s a reminder to weigh the potential for diversification against the risks of volatility and illiquidity.

Resources:

1. Donald Trump Executive Order: https://www.whitehouse.gov/fact-sheets/2025/08/fact-sheet-president-donald-j-trump-democratizes-access-to-alternative-assets-for-401k-investors/

2. CNBC Report: https://www.cnbc.com/2025/08/07/new-trump-executive-order-brings-new-investment-options-to-401ks.html

3. Yahoo Finance Report: https://finance.yahoo.com/news/experts-advise-caution-in-adding-private-assets-like-crypto-to-401ks-153313520.html