Trump Signs Order to Allow Alternatives Like Bitcoin, Private Equity in 401(k) Plans

In a move that could reshape retirement investing, U.S. President Donald Trump has signed an executive order allowing 401(k) plans to include higher-risk private equity and cryptocurrency investments.

This directive aims to provide American workers greater freedom and opportunity to diversify their retirement portfolios beyond traditional stocks and bonds, but also provides provide private equity and cryptocurrency players long-sought access to a pool of funds worth trillions. According to Investment Company Institute's Q1 2025 report , 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.

The significance of this order lies in its potential to mainstream cryptocurrency within the largest retirement savings vehicle in the U.S. Historically, 401(k) plans have been limited to conventional investments, but this change signals a growing acceptance of digital assets as legitimate financial instruments.

"[T]he writing was already on the wall with the approval of the first bitcoin ETF back in 2024," said veteran investment professional Benedict Yap, maintaining that last night's news "really comes as no surprise."

This shift could unlock billions of dollars in new capital inflows into the crypto market as millions of workers gain access to digital assets within their retirement plans.

Despite initial enthusiasm, questions remain about how plan administrators will implement this change and manage the unique risks associated with cryptocurrencies, such as volatility and custody.

With an investment career spanning over two decades, including roles with Lion Global Investors, Mercer Investments, Fullerton Fund Management and Sygnum, Yap says that "investing principles do not significantly differ across asset classes; key aspects pertaining to investment impetus, objective and fiduciary duty remain unchanged."

"But just because you can doesn’t mean you should."

Other concerns around the suitability of alternative assets for retirement portfolios include risk and understanding, liquidity, fee structures.

"Private equity assets are typically more risky and, like real estate, can be relatively illiquid. The potential for higher returns also comes at a higher cost," said Timothy Misir, head of research at BRN.

Regulatory guidance will be crucial to ensure investor protections while expanding the pool of qualified assets.

"We expect that any sort of retirement savings product with a crypto component will take some time to come online, given that federal agencies need time to change the rules before the likes of Fidelity or Vanguard can craft suitable plans to offer," Misir said.

"Moreover, employers may not necessarily be too eager to switch out of their existing plans," he added.

For now, this executive order marks a major milestone in crypto’s journey from niche investment to mainstream financial asset. It highlights the intersection of politics, finance, and technology in the evolving digital economy.