President Donald Trump has issued an executive order allowing 401(k) retirement plans in the U.S. to invest in cryptocurrency and private equity, prompting regulatory actions from federal agencies.
The decision could significantly impact $12 trillion in 401(k) assets, potentially broadening investment options while requiring new education on associated risks, yet no immediate changes are anticipated.
President Donald Trump has signed an executive order that allows 401(k) retirement plans to invest in cryptocurrency and private equity. This landmark decision modifies existing rules governing retirement savings in the United States. Trump expands 401(k) investors’ access to alternative assets
The order instructs the SEC, Labor Department, and Treasury to revise investment regulations. As these changes unfold, industry leaders from Swan Bitcoin, Vanguard, and others have begun weighing in on the implications. Cory Klippsten, CEO, Swan Bitcoin, emphasized, “It was inevitable that bitcoin would make its way into American 401(k)’s. As fiduciaries realize bitcoin’s risk-adjusted upside over the long term, we’ll see growing allocations, especially from younger, tech-savvy workers who want hard money, not melting ice cubes.” (Source: Business Insider)
Unlocking $12 Trillion in Asset Potential
The decision to allow cryptocurrency and private equity in 401(k) plans is seen as a move that could unlock approximately $12 trillion in assets. Such potential shifts have generated various industry opinions.
This update could increase institutional demand for Bitcoin and selected cryptocurrencies. However, cautious approaches are advised due to the absence of initial on-chain data and anticipated regulatory revisions. Overview of 401(k) plans for retirement sponsors
Investment Risk: Cryptocurrency in 401(k) Plans
In 2020, changes were made to increase private investments in retirement accounts but lacked this extent of inclusion. Historical trends indicate caution as private equity often underperformed public indices after fees. Business Insider Twitter account for latest news
Experts warn about the complexities and risks of including cryptocurrency in 401(k) portfolios. Cory Klippsten of Swan Bitcoin foresees possible expansion, while others stress the need for investor education.
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