An official White House fact sheet notes that more than 90 million Americans participate in employer-sponsored defined-contribution plans. Data from the Investment Company Institute further indicates that total U.S. retirement assets were valued at $43.4 trillion as of March 31, 2025.
These statistics demonstrate that the majority of Americans plan to have enough financial assets to eventually retire. However, most people are currently restricted from investing in alternative assets.
This will soon change, though. U.S. President Donald Trump recently signed an executive order (EO) that will allow American workers to add alternative assets to their 401(k) portfolios, including private equity, real estate, and cryptocurrency.
Milestone Moment for the Crypto Sector
While this EO is meaningful for American workers, it also represents a major milestone for the crypto sector.
Petr Kozyakov, CEO of payment infrastructure platform Mercuryo, told Cryptonews that the inclusion of Bitcoin in 401(k) plans reflects the growing mainstream acceptance of digital assets.
“For years, alternative investments have been a staple of institutional and high-net-worth investor portfolios, offering diversification and potentially higher returns,” Koyzakov said. “By allowing a small, measured allocation to Bitcoin, everyday retirement savers have the opportunity to allocate to digital gold.”
Echoing this, a Paxos spokesperson told Cryptonews that the blockchain infrastructure provider has long viewed crypto as a legitimate and advantageous investment.
“We are still waiting for some details of this executive order, and there are some administrative hurdles; however, this is a huge milestone for mainstream adoption,” the spokesperson said.
They added that this move will likely encourage a much larger customer base to hold crypto or tokenized assets, with the backing of Paxos’ secure and regulated products.
Risks Associated with Crypto in 401(k) Plans
On the flip side, there are a number of risks associated with adding crypto to a 401(k) portfolio.
Miles Fuller, director of government solutions at Taxbit, told Cryptonews that even before the recently signed EO, there was no legal barrier to 401(k)s offering crypto investments. Yet Fuller noted that the main issue was—and still is—about risk.
“Employers and, more specifically, plan administrators hired by employers, are fiduciaries subject to a variety of rules under the Employee Retirement Income Security Act (ERISA),” Fuller said. “Those rules may impose liability on the plan administrators if things go wrong (think investment losses) for plan participants (employees) and the fiduciary requirements were not met.”
Fuller added that the fiduciary rules set forth by ERISA are not always clear or easy to apply. As such, administrators tend to take a conservative approach to plan administration to minimize liability risk.
“The volatility of crypto as an investment class makes it harder, but not impossible, to manage that fiduciary risk as a plan administrator, which has resulted in crypto being avoided historically,” Fuller elaborated.
While this may be, Fuller pointed out that plan administrators like ForUsAll and Fidelity are already managing that risk by offering plans with direct crypto investment options for employees.
Additionally, Fuller pointed out that the recently signed EO doesn’t contemplate direct investment in crypto. Rather, the document refers to indirect investments in digital assets, such as holdings in actively managed investment vehicles that may be investing in crypto.
“This is likely managed mutual funds or private equity funds that invest in crypto, rather than direct crypto investment for employees,” Fuller said. “With that said, consumer protection and financial education are necessary elements as well. The funds involved here are real people’s retirement nest eggs, not everyday investments.”
Combating Risk in 401(k)s
While market volatility seems to be the biggest risk associated with adding crypto to 401(k) portfolios, Kyle Chassé—founder of MV Global—told Cryptonews that this risk can be combated with a long-term, dollar-cost averaging strategy.
“Investing in a 401(k) is inherently a multi-decade play, which perfectly aligns with the long-term growth trajectory of crypto,” Chassé said.
He added that this risk can be mitigated by investing in a diversified portfolio of crypto assets, as well as a mix of other traditional assets. “Investing with qualified custodians and taking advantage of BTC or ETH exchange-traded products are also great ways to mitigate risk.”
When Will Americans Add Crypto to Their 401(k)?
Risks aside, the implementation of crypto investments in 401(k) plans will likely take time.
Q. Ghaemi, a member of investment platform Swan Bitcoin’s private team, told Cryptonews that this policy adoption will likely take months or even a year.
“Regulators still need to finalize guidance, and plan providers need to build compliant offerings. The demand is there, but the infrastructure and fiduciary frameworks need to catch up,” Ghaemi stated.
While this may be, Fuller noted that adoption could be immediate.
“Because the law already allows it and the EO clearly indicates a favorable view, I anticipate that we will reasonably quickly see a few other plan administrators begin to allow these options,” he remarked.
Fuller added that growth is likely to continue once the U.S. Department of Labor completes its review of policies and regulations over the next six months.
“The most interesting downstream impact will be seeing what new investment vehicles begin to take shape that include crypto as a component. Those new products may take some additional time to be designed and go through the approval process, but some already exist in the form of crypto-based exchange-traded funds that could be offered within 401(k) plans,” he said.
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