Trump Enacts Decree to Include Cryptocurrencies and Private Equity in Retirement Savings Account Options

The world of retirement savings is set for a significant shift, as U.S. President Donald Trump signed an executive order in [unspecified date] allowing 401(k) plans to include higher-risk investments such as private equity and cryptocurrencies. This directive, which marks a major milestone in crypto's journey from niche investment to mainstream financial asset, aims to provide American workers greater freedom and opportunity to diversify their retirement portfolios.

The potential for higher returns from private equity and cryptocurrency investments comes at a higher cost. These assets are typically more risky and can be relatively illiquid, as highlighted by the executive order. However, veteran investment professional Benedict Yap stated that investing principles do not significantly differ across asset classes. Key aspects pertaining to investment impetus, objective, and fiduciary duty remain unchanged, according to Yap.

Employers may not necessarily be too eager to switch out of their existing plans, and Fidelity or Vanguard may need time to craft suitable plans to offer retirement savings products with a crypto component. It is expected that any retirement savings product with a crypto component will take time to come online due to the need for federal agencies to change the rules. Regulatory guidance will be crucial to ensure investor protections while expanding the pool of qualified assets.

The shift could unlock billions of dollars in new capital inflows into the crypto market. The approval of the first bitcoin ETF back in 2024 signaled a potential trend towards mainstreaming cryptocurrency investments. Questions remain about how plan administrators will implement this change and manage the unique risks associated with cryptocurrencies.

The executive order highlights the intersection of politics, finance, and technology in the evolving digital economy. As at the end of March 2025, Americans held $12.2 trillion in all employer-based DC retirement plans, of which $8.7 trillion was held in 401(k) plans. Historically, 401(k) plans have been limited to conventional investments, but this change signals a growing acceptance of digital assets as legitimate financial instruments.

This directive could mainstream cryptocurrency within the largest retirement savings vehicle in the U.S. However, it is important to note that the journey towards mainstream acceptance of cryptocurrencies in retirement savings is just beginning, and many challenges lie ahead. Nonetheless, this executive order is a significant step forward in the integration of cryptocurrencies into the mainstream financial system.

Trump Enacts Decree to Include Cryptocurrencies and Private Equity in Retirement Savings Account Options