The U.S. Considers Opening Retirement Funds to Invest in Crypto Assets and Other Alternative Assets

According to reports, the U.S. government is considering signing an executive order that would allow retirement plans such as 401(k) to invest in Crypto Assets, gold, and private equity as alternative assets. This initiative aims to reassess the current restrictions on retirement investment and pave the way for digital assets to enter the $8.7 trillion retirement market in the U.S.

This move was not sudden. As early as May, the U.S. Department of Labor withdrew its previous guidance document on "taking a cautious approach to Crypto Assets." Even earlier, in 2022, there were proposals by lawmakers to include digital assets in the framework of retirement income security legislation, which, although not passed, laid the groundwork for the current policy shift.

The core objective of this executive order is to break the long-standing focus of the 401(k) plan on traditional stocks and bonds, granting it greater flexibility in asset allocation. It will instruct regulators to study and remove barriers that hinder alternative assets, especially digital assets, precious metals, and funds focused on corporate mergers and acquisitions, private loans, and infrastructure transactions from being included in the 401(k) professionally managed funds.

The government has stated its commitment to restoring prosperity for the American public and ensuring its economic future. However, any decisions can only be considered official policy after they are formally announced. Nevertheless, this statement still reveals a strong signal for promoting the mainstream adoption of Crypto Assets.

In fact, this move is a continuation of a series of pro-crypto policies. From the campaign promise to liberate digital currency, to related companies massively purchasing Bitcoin and other digital currencies, and even planning to launch their own stablecoin and other digital tokens, the government has become an important player in the field of Crypto Assets.

To understand the potential impact of this policy, it is necessary to understand the structure and scale of the U.S. pension market. As one of the largest pension systems in the world, the total scale of the U.S. pension market reaches up to $9 trillion. As of March 31, 2025, the total assets of all employer-sponsored defined contribution retirement plans have reached $12.2 trillion, of which the 401(k) plan holds $8.7 trillion.

These massive funds primarily come from tens of millions of American wage earners. The 401(k) plan has become the core of long-term savings for most wage-earning families due to its advantages such as payroll deductions, tax benefits, and employer matching contributions.

Traditionally, these pensions mainly flow into publicly traded securities. As of the end of March 2025, $5.3 trillion in the 401(k) plan is managed by mutual funds, of which equity funds account for $3.2 trillion, and hybrid funds (including target date funds) manage $1.4 trillion. It is precisely this current asset allocation, dominated by equity and bond mutual funds, that provides ample space for the "ice-breaking" of alternative investments being promoted.

In addition to Crypto Assets, this executive order represents a significant opportunity for the world's largest private equity firms. These giants have largely pinned their hopes for future growth on managing funds from regular retirement savers. Private equity firms predict that once they successfully enter the 401(k) retirement plan market, they could attract hundreds of billions of dollars in new industry assets.

To this end, they have actively established partnerships with large asset management companies to provide investment services for retirement savings plans. At the same time, some state governments have begun pilot programs allowing retirement funds to allocate a certain percentage of Crypto Assets, providing a reference for federal-level policies.

However, challenges still exist. Investing retirement savings into less liquid private assets carries risks, such as high fees, a higher overall leverage ratio, and lower transparency in the valuation of fund assets, all of which require careful consideration by regulators and investors.

This policy may redefine the meaning of "retirement savings." Whether it allows ordinary people to share in the technological dividends of the digital age or exposes pensions to new risks depends on how regulators find a balance between innovation and protection.