According to the Financial Times, U.S. President Donald Trump plans to issue an upcoming executive order that would allow cryptocurrencies, gold, private equity, and other "alternative investments" to be included in the U.S. 401(k) retirement plans. This move is expected to have a significant impact on the U.S. retirement investment market.
The report cites three informed sources indicating that once Trump’s executive order goes into effect, regulatory bodies will need to carefully review existing regulations to address barriers preventing alternative investments from entering professionally managed 401(k) retirement funds.
This initiative comes as other federal agencies in the U.S. have recently relaxed their stance on allowing cryptocurrencies in retirement funds. Earlier reports indicated that the Department of Labor rescinded previous guidance on May 28, which had cautioned fund managers to be "extremely cautious" before incorporating cryptocurrencies into investment strategies. The Department of Labor claimed this move aimed to correct what it described as the Biden administration's "overreach."
Members of Congress have also attempted to expand the acceptable investment options for 401(k) plans to include cryptocurrencies and other alternative assets. In 2022, Michigan Republican Representative Peter Meijer introduced the Retirement Savings Modernization Act, aimed at amending the Employee Retirement Income Security Act of 1974 to include digital assets, private equity, and venture capital; however, the bill ultimately did not receive a vote.
According to the Investment Company Institute, as of March, Americans held approximately $8.7 trillion in 401(k) retirement funds. The 401(k) plan allows employees to transfer a portion of their wages into tax-deferred investment accounts, with employers often providing matching contributions.
Some State Governments Begin Allowing Retirement Funds to Buy Bitcoin
Some state governments have started to allow or are considering allowing digital assets to be included in state retirement investment plans. For example, the North Carolina legislature proposed two bills in March allowing up to 5% of specific retirement fund balances to be invested in cryptocurrencies. The Michigan Retirement System disclosed in 2024 that it holds approximately $6.6 million in ARKB Bitcoin ETF and $10 million in Ethereum ETF investments; the Wisconsin Investment Board revealed holdings worth $163 million in spot Bitcoin ETFs.
Trump's potential executive order would have a profound impact on the U.S. retirement investment market and is expected to prompt a reevaluation of regulatory and investment strategies. However, the specific details of this initiative and its ultimate implementation remain to be seen.
