Trump Pushes To Allow Bitcoin And Crypto In Retirement Accounts

In Brief

Donald Trump’s new executive order could allow millions of Americans to include cryptocurrencies and other alternative assets in 401(k) retirement plans, potentially diversifying portfolios but adding new risks.

Millions of Americans could potentially be able to add cryptocurrencies and other high-risk alternative assets to their workplace retirement savings plans, thanks to an executive order that President Donald Trump signed Thursday.

The directive instructs federal regulators to explore ways to remove barriers that currently discourage employers from offering such options in 401(k) plans — potentially granting everyday workers access to investments once reserved for institutions and high-net-worth individuals.

The order could free up trillions in retirement asset allocations into markets such as private equity, venture capital, real estate, precious metals, and, for the first time at scale, digital currencies such as Bitcoin and Ethereum. Advocates for the change believe it would diversify retirement portfolios and improve Long-Term Returns. Detractors argue that it would expose savers to additional risk in turbulent and less liquid markets.

From Stocks and Bonds to Bitcoin and Beyond

As of today, over 90 million workers in the U.S. are engaged in 401(k) plans that have historically concentrated on public equities and bonds. For many Americans, 401(k) plans swapped out traditional pensions, with companies shifting responsibility for the investment decision – and investment risk – from themselves as the employer to the worker.

Currently, under Department of Labor regulations, companies that manage these accounts must consider risk, cost, liquidity and other factors when selecting investment options. High fee, opaque or illiquid assets such as private equity and crypto have generally been left off regular retirement menus.

Trump’s order gives the Department of Labor 180 days to review those rules and propose changes. Officials have indicated the process will take time, with no immediate impact on plan offerings. Still, investment management giants like State Street and Vanguard have already begun partnering with alternative asset managers such as Apollo Global and Blackstone to design private-equity-focused retirement funds — a sign that the industry is preparing for a shift.

A Policy Shift with Political Undertones

Trump’s move follows years of lobbying from the $5 trillion private equity industry and the fast-growing crypto sector. Analysts note that private market executives have long sought access to 401(k) funds, while crypto leaders — many of whom supported Trump’s 2024 campaign — have pushed for mainstream acceptance.

Under President Biden, federal regulators advised plan sponsors to treat cryptocurrency investments with “extreme care,” citing their volatility. That stance echoed warnings from prior administrations about private market assets, which can be riskier and harder to value than publicly traded securities.

The new order reverses that caution, marking what deVere Group CEO Nigel Green described as a “breakthrough moment for crypto.” Green said the inclusion of digital assets in retirement accounts removes a “psychological and regulatory barrier” that had kept crypto on the fringes of traditional finance.

Bitcoin, which has more than doubled in value since Trump’s election, rose 2% on the day of the announcement to a record $116,542, currently sitting at $121,000. Analysts say even a modest allocation of 401(k) funds to crypto could unleash hundreds of billions of dollars in new demand, fueling further adoption and innovation.

Industry Reaction: Opportunity and Caution

For private equity leaders, the prospect of tapping into 401(k) accounts represents a long-held goal. Blackstone CEO Steve Schwarzman has called access to these retirement assets a “dream” for the industry, noting that the capital could support long-term investments in infrastructure, real estate, and private companies.

Bryan Corbett, president and CEO of the Managed Funds Association, said the group looks forward to working with the administration on a framework that would expand access to alternatives “with appropriate investor guardrails.”

Still, experts caution that these asset classes carry unique challenges. Lisa A.K. Kirchenbauer, founder of Omega Wealth Management, warned that savers need to “own what you know” — and avoid investing in assets they do not fully understand

She suggested that those exploring private assets should start with a small allocation, typically 5% to 10% of a portfolio, and ensure they understand liquidity rules before committing funds.

Private equity investments, for example, often require years before capital can be returned to investors. While the average historic annual return for private equity since 1990 is about 13% (net of fees), compared to roughly 10.6% for the S&P 500 with dividends, the lack of liquidity and higher fees may not suit all retirement savers.

Rethinking the Retirement Portfolio

Some industry leaders see the executive order as part of a broader rethinking of retirement asset allocation. BlackRock CEO Larry Fink has argued that the traditional 60/40 portfolio split between stocks and bonds may give way to a 50/30/20 model that includes private assets such as real estate, infrastructure, and private credit.

Fink has noted that pension funds — which have historically outperformed 401(k) plans by about 0.5% annually — have long invested in such assets. By contrast, most defined-contribution plan providers have avoided them, in part due to regulatory uncertainty. Trump’s order aims to change that by showing plan sponsors “how it’s done” and providing a framework for responsible inclusion.

Crypto’s Path from Fringe to Mainstream

The cryptocurrency market sees the order as validation and opportunity. Younger, more digitally inclined workers have expressed a particular interest in Bitcoin, which has generally moved upward since its inception almost 20 years ago.

Cory Klippsten, CEO of Swan Bitcoin, has said it was “inevitable” that Bitcoin would make its way into 401(k)s, predicting growing allocations as fiduciaries recognize its “risk-adjusted upside” over the long term.

If crypto gains traction in retirement plans, analysts expect it will hasten the broader integration of digital assets into the global financial system. There’s precedent: with other major economies reforming their pension regulations, the U.S. reforms could have a ripple effect across Europe and Asia, where adoption rates are high.

What Comes Next for Savers

Despite the policy shift, experts emphasize that change won’t come fast. Retirement plan providers like Fidelity, Vanguard, or T. Rowe Price need time to design compliant products; employers will most likely not change their offerings overnight

For now, consider the trade-offs. Private assets and crypto can provide diversification and additional upside potential, but it is not without trade-offs in complexity, volatility, and liquidity

Kirchenbauer pointed out that investors should be especially prudent to avoid overestimating return upside associated with these riskier assets, if that investor is in the short term window — i.e. nearing retirement.

Trump’s order may eventually reshape the retirement landscape for Americans with portable retirement accounts by providing more options to customize portfolios. Whether those options lead to stronger nest eggs or more opportunities for risk will depend on how the rules are constructed, how plan sponsors react, and how informed savers are regarding their choices.

As Green put it, retirement savings are “one of the most conservative pools of capital in existence.” If crypto and other alternatives can earn their place there, he argued, they can earn their place anywhere.