The US president Donald Trump has signed an executive order opening the door for cryptocurrency, private equity and real estate to be included in 401(k)—the bank account Americans generally use for retirement plans. The move is part of his administration’s broader effort to court the crypto industry and roll back financial regulations. Trump, once a vocal crypto skeptic, now frames the change as a way to “relieve regulatory burdens” and improve diversification for American workers’ savings.
The order directs the Department of Labor to work with the Treasury, the SEC and other regulators on potential parallel changes. In practical terms, it could create a new funding channel for alternative asset managers—a sector led by giants like BlackRock, KKR and Apollo—which have been lobbying to access retirement savings.
Critics see a different picture, pointing that cryptocurrencies remain highly volatile, with price swings that can wipe out double-digit percentages in days. In addition to this factor, crypto assets operate in an evolving regulatory landscape worldwide too, which can add uncertainty for savers. Democratic lawmakers have also raised red flags: senator Elizabeth Warren, in a tough letter to Empower Retirement, questioned how investors could be protected “given the sector’s weak investor protections, lack of transparency, expensive management fees, and unsubstantiated claims of high returns”.
The operational differences between traditional and alternative investments are significant. Private equity, real estate and crypto carry lower disclosure requirements, have higher fees, and also less liquidity. For 401(k) savers accustomed to daily-priced mutual funds and ETFs, this shift represents a major change in risk profile.
Industry proponents argue that these products could be suitable for younger savers willing to accept higher risk in exchange for potentially higher returns, especially if allocations are gradually reduced as investors near retirement. Asset managers see the move as a long-term play: defined contribution plans are one of the last major untapped pools of capital for alternatives.
For now, the timeline for actual changes to 401(k) offerings remains unclear. Regulatory coordination between agencies, the threat of litigation, and employer hesitancy could delay implementation. Still, the executive order signals a major policy shift in how the US government views crypto’s role in the finance life of citizens.
