US President Donald Trump has signed an executive order allowing 401(k) investors to diversify their portfolios with alternative assets, including Cryptoassets.
This executive order instructs the US Department of Labor to coordinate with agencies such as the SEC and the Department of Treasury to develop regulations supporting investment diversification, helping 401(k) retirement plans access the Cryptoasset market more effectively and safely.
- The executive order allows 401(k) investment diversification into alternative assets, including Cryptoassets.
- The Department of Labor will collaborate with the SEC and Department of Treasury to create an appropriate legal framework.
- Accessing Cryptoassets through ETFs and stocks with Cryptoasset holdings is expected to promote market growth.
How does President Trump's executive order affect the Cryptoasset and Bitcoin market?
The executive order opens up the possibility for 401(k) investors to access Cryptoassets through strictly managed investment channels.
With over $8.7 trillion accumulated through 401(k) plans, this move will expand the Capital scale flowing into the Cryptoasset market, contributing to driving price increase trends. 401(k) managers can invest in prominent Cryptoasset ETFs like Bitcoin, Ethereum, as well as corporate stocks holding Cryptoassets, helping to diversify portfolios and increase profit opportunities for workers.
This is even more significant as major institutions play a role in promoting Bitcoin to reach record-high prices before the 2034 halving event, indicating that new Capital flows will continue to consolidate growth momentum.
"Alternative assets like private equity, real estate, and digital assets provide competitive returns and diversification benefits. Excessive regulation and litigation risks have limited ERISA investment funds from including alternative assets in their portfolios, reducing workers' retirement development speed."
Quoted from President Donald J. Trump's Executive Order, 2025
How will the Department of Labor and regulatory agencies coordinate to support investment diversification?
The executive order requires the Department of Labor to collaborate with the US Securities and Exchange Commission (SEC), Department of Treasury, and related organizations to develop standardized legal frameworks for 401(k) investments in alternative assets.
This collaboration aims to ensure Cryptoassets are clearly classified according to each agency's regulations, facilitating conditions and limiting legal risks for investors. The goal is to help workers access diverse assets with appropriate legal protection while promoting sustainable development of retirement and Cryptoasset markets.
What Cryptoasset investment forms are currently accessible through 401(k) under the executive order?
401(k) can currently invest in spot Cryptoasset ETFs, with prominent representatives being Bitcoin and Ethereum.
Additionally, 401(k) fund managers can access stocks of large companies investing in Cryptoasset reserves, such as stocks of some Nasdaq-listed companies, thereby leveraging Cryptoasset market growth through indirect channels. This approach helps diversify portfolios with more tightly controlled risk levels.
Compared to other investment channels, what are the highlights of Cryptoasset investment through 401(k)?
| Criteria | 401(k) Cryptoasset Investment | Direct Exchange Investment |
|---|---|---|
| Legal Framework | Strict compliance, coordinated by Department of Labor and SEC | Dependent on exchange and national regulations, higher legal risks |
| Diversification | Through ETFs and stocks with Cryptoasset assets | Usually direct Coin/Token purchase |
| Risks | Thoroughly analyzed, risks reduced through professional management | Higher due to market volatility and security |
| Convenience | Automatic in retirement plans, long-term integrated | Requires individual knowledge and management time |
Frequently Asked Questions
What changes does the new executive order bring to 401(k) investment scope?
The order allows additional alternative assets, including Cryptoassets, into 401(k) investment portfolios to increase diversification and profitability.
How are Cryptoassets permitted for investment through 401(k)?
Through ETFs and corporate stocks holding Cryptoassets, ensuring compliance with regulatory agency guidelines.
Which agencies will the Department of Labor collaborate with to support the executive order?
The Department of Labor will work with the US Securities and Exchange Commission (SEC) and Department of Treasury to develop a comprehensive legal framework.
What is the impact of the executive order on the Cryptoasset market?
Creating new Capital from the very large assets in 401(k), promoting development momentum and price increases in the Cryptoasset market.
Can individual investors benefit from 401(k) diversification with Cryptoassets?
Workers participating in 401(k) will benefit from diversification into alternative assets without direct investment.
