According to a Bloomberg report, today in Washington, U.S. President Donald Trump will sign an executive order allowing 401(k) retirement plans to invest in private equity, real estate, cryptocurrencies, and other alternative assets. This decision will unlock a massive market worth approximately $12.5 trillion by instructing the Department of Labor to reassess existing guidance under the 1974 ERISA law. The department will clarify the responsibilities of retirement fund managers in offering funds that include alternative assets, providing diversification for savers and addressing long-standing regulatory uncertainties sought after by industry representatives.
The Dawn of New Investment Opportunities in Retirement Plans
With the executive order, the Department of Labor will review guides that determine the share of alternative investments within 401(k) plans. Although current regulations mandate managers to maintain a “reasonable price and reasonable risk” balance, they don’t draw explicit boundaries for assets like private equity or cryptocurrencies. The new assessment aims to establish clear criteria to protect participant interests when fund providers add alternative asset classes to their portfolios.
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The process will determine the extent to which alternative assets can be included in multi-asset funds offered to retirement holders. Furthermore, the return-risk balance of volatile assets like cryptocurrencies in composite funds will be recalculated according to current market data. The Department will create a new “suitability” standard based on contemporary technical analyses and historical performance data, allowing managers to base investment decisions on more robust justifications.
Potential Effects on the Bitcoin and Cryptocurrency Market
If formalized, the decision has the potential to create long-term, steady fund inflows into the Bitcoin and cryptocurrency markets. Analysts suggest that even partial cryptocurrency allocations by retirement funds will enhance market liquidity and strengthen traditional investors’ confidence. Especially during a time when spot crypto ETFs have become widespread, institutional demand through 401(k) channels could balance price volatility.
Industry representatives expect the final guide issued by the department to address crypto custody solutions, transparency standards, and risk disclosures in detail. Companies aim to offer cost-effective custody and insurance services to reduce technical barriers for plan managers. This could permanently open the doors of the 401(k) market to the cryptocurrency sector.
The news sparked upward movement in cryptocurrencies. According to CryptoAppsy’s data, Bitcoin rose by 2.01%, surpassing the $116,000 threshold, while Ethereum 
$3,094, the largest altcoin, increased by 5.46%, crossing $3,800. Similar rises occurred in coins like XRP, BNB, and Solana 
$139.
