U.S. President Donald Trump has signed an executive order to allow cryptocurrency investments 401(k) Retirement plans, opening up millions of dollars to flow into asset classes.
The order also allows for private equity investments, which it hopes to significantly expand the scope of funds that retirement plan providers can direct to. This, in turn, can help encrypt prices while combining digital assets with a wider financial system.
“Alternative assets such as private equity, real estate and digital assets provide competitive returns and diversified benefits,” A fact sheet Released Thursday.
While it has never been technically banned from adding cryptocurrencies to retirement plans, the Department of Labor has previously provided guidance to trustees to “extreme care before they consider adding cryptocurrency options to 401 before they consider adding cryptocurrency options to 401(k) Planned investment menu for plan participants. ”
In May, the guide was completely revoked. Trump’s order will now direct the DOL to release new guidance, which will make cryptocurrencies the same as other assets.
This could encourage wealth managers who have previously stayed away from the risky asset class to reconsider their positions, potentially bringing millions of dollars into exchange-traded funds (ETF) Hold Bitcoin
and other assets, or direct cryptocurrencies.
“The order says ‘cryptocurrency belongs to 401(k)s. ‘It’s about the government avoiding it and letting people make their own decisions. “Bitwise chief investment officer Matt Hougan said.
The order comes as crypto assets have finished one of its best quarters to date, with many of them reaching new all-time highs in June amid several promising steps towards clearer regulation in the US Bitcoin, which is currently trading at $117,351 and is up 26% year-to-date, has also been seeing its volatile shrink to levels not seen since 2023, signaling a maturing market and investor confidence.
Although other financial instruments holding assets can be added to the retirement plan given the risk aversion nature of such investments, many managers can access ETFs instead of direct contact.
“I’ve traded BTC ETFs in the IRA. I think BTC ETFs are good for retirement accounts. However, sending coins straight seems too risky and is more suitable for non-retirement accounts,” said Jeffrey Hirsch, CEO of Hirsch Holdings and stock trader Almanac Chief.
Since its launch in January 2024, the spot Bitcoin ETF has achieved unprecedented success. (go) Now, one person is dealing with more than $85 billion worth of Bitcoin.
Undo order
Trump signed several execution orders on Thursday, including another one targeting the revocation. A fact sheet The White House said the order would “ensure that federal regulators do not promote policies and practices to allow financial institutions to deny or restrict services based on political beliefs, religious beliefs, or legitimate business activities, ensuring fair opportunities for banking for all Americans.”
The order itself guides the federal banking regulator, the Small Business Administration and the Treasury Secretary to work with other officials to “eliminate the use or equivalent concept of reputational risks or equivalent concepts for the next six months.”
The order itself does not mention cryptocurrencies, although the factual statement says that “the digital asset industry is also an unfair goal of revoking plans.”
