Trump Greenlights Crypto Assets for Americans’ Retirement Plans

Traditionally, the commonly deployed 401(k) retirement plan, is invested in stocks, bonds, and mutual funds. Assets like crypto, gold, and private equity have generally been off-limits. The new executive order directs the Labor Department to reexamine “guidance on a fiduciary’s duties regarding alternative asset investments.”

Since the start of his second term, President Trump has bolstered the US crypto industry through public advocacy, supporting legislation such as the GENIUS Act and CLARITY act. 

Rewrite the rules

While there is not an immediate change for how more than 90 million people will invest in their accounts, the new order directs federal agencies to eliminate barriers, opening the door for broader investment choices in retirement planning. 

Agencies will need to rewrite regulations to allow for the new addition in choice that the order provides. The Department of Labor, Treasury, and SEC (Securities & Exchange Commission) will need to “determine whether parallel regulatory changes should be made at those agencies to give effect.”

Not just crypto

Alongside the crypto industry, the $5 trillion private equity industry will also benefit from the order. The administration defined alternative assets as “private equity, real estate, and digital assets.” 

Crypto advocates and the industry cheered, hailing the move as something inevitable and that will benefit Americans in the long run. 

Growing allocations

"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." said Cory Klippsten, the CEO of Swan Bitcoin. 

The order marks a significant change from past administrations, both Republican and Democrat. Historically, the consensus has been that riskier, more volatile investment mechanisms like private equity or crypto should stay out of a 401(k). Previous guidance from the Department of Labor for fiduciaries was to “exercise extreme care before they consider adding a cryptocurrency option to a 401(k) plan's investment menu for plan participants."

In a statement, Labor Secretary Lori Chavez-DeRemer wrote "this executive order further supports our efforts to improve flexibility and eliminate unfair one-size-fits-all approaches.”