Retirement Funds Can Invest in Cryptocurrency! Trump Signs Executive Order: 401(k) Plans Will Allow Investment in Cryptocurrencies and Private Assets

08/07/2025

Trump’s New Move on Retirement Funds

U.S. President Trump has made another move, this time targeting the retirement system that every working individual is concerned about. According to senior White House sources, Trump will sign an executive order on Thursday that allows retirement plans like 401(k) to include alternative assets such as cryptocurrencies, private equity, and real estate. This order could reshape the allocation of retirement assets across the United States and open new entry points for high-risk assets like Bitcoin.

(Trump Plans to Open Up U.S. 401(k) Retirement Plans for Cryptocurrency Investment, $9 Trillion Scale Anticipated)

Trump’s Executive Order Aims for Retirement Investment Liberalization

The executive order that Trump is expected to sign at noon on Thursday will instruct the U.S. Department of Labor to re-examine the fiduciary guidelines for private market investments under the Employee Retirement Income Security Act (ERISA) of 1974. This federal regulation has long been the core law governing 401(k) plans and other Defined Contribution Plans.

According to Bloomberg, this policy is a significant victory for the alternative asset industry. For years, asset managers, including those in cryptocurrencies and private equity, have lobbied to include these assets in standard retirement account investment options. Now, concrete results are finally being seen during Trump’s administration.

Bitcoin Reacts Positively, Private Equity Stocks Slightly Rise

Upon the news, Bitcoin prices surged, reflecting the market’s high expectations for the new policy. Stocks of private equity giants such as Apollo Group also saw slight gains in Thursday’s early trading. This indicates an optimistic market outlook on the potential influx of funds into 401(k) plans that open up to alternative assets.

Why Were Private and Crypto Assets Excluded from 401(k) Plans in the Past?

While university endowments and large pension funds have long included private equity and real estate in their portfolios, 401(k) plans have historically shied away from these types of assets. The main reasons include:

High management fees
Lack of transparency in investment information
Longer lock-up periods and lower liquidity

These factors have made them appear riskier and less investor-friendly to the average investor. However, as early as 2020, during Trump’s first term, the Department of Labor issued a guidance stating that private assets could be included in defined contribution retirement plans under certain conditions. This policy was reaffirmed after the Biden administration took office.

The Layout of Alternative Assets in 401(k) Plans Has Quietly Begun

In fact, the market has already started preparing for this wave of change. By the first quarter of 2025, the total assets in U.S. 401(k) accounts are expected to reach approximately $8.7 trillion, and asset managers and retirement plan providers are already gearing up.

For instance, in June of this year, the world’s largest asset management company, BlackRock, announced that it would launch a target date 401(k) fund in the first half of 2026, which will allocate 5% to 20% of its assets to private investments. In May, Empower, the second-largest retirement plan provider in the U.S., also stated it would collaborate with firms like Apollo to allow some accounts to start accepting private assets by the end of the year.

How Will Trump’s Policy Affect Your Retirement Funds?

This executive order signifies that 401(k) plans will no longer be limited to stocks and bonds; a more diversified asset allocation is expected to enhance long-term return potential. However, it should also remind investors that private equity and crypto assets come with both risks and rewards, high entry barriers, and low liquidity, making them unsuitable for every investor.

It remains to be seen how various 401(k) platforms will adopt and design products and risk control mechanisms after the Department of Labor updates its guidelines.

Beginning of Investment Freedom or a Trial of Risks?

Trump’s latest executive order is not only a boon for the alternative asset industry but also signals a significant transformation in the U.S. retirement investment ecosystem. For investors, this could mark the beginning of the liberalization of investment choices; for regulators and retirement plan designers, it presents a new challenge in risk management.

Risk Warning

Investing in cryptocurrencies carries high risks, and prices can be extremely volatile. You may lose your entire principal. Please assess risks cautiously.