The United States opens 401(k) retirement plan to invest in Crypto Assets and other alternative assets

US President Trump recently signed an executive order allowing American citizens to invest their 401(k) retirement savings in Crypto Assets, private equity, and real estate among other alternative assets. The order mandates relevant departments to reassess the investment guidelines for alternative assets in fixed contribution plans within 180 days and clarify their stance on alternative assets. Additionally, the order directs the US Securities and Exchange Commission to facilitate access to alternative assets for fixed contribution retirement savings plans.

Previously, the U.S. Department of Labor issued guidance suggesting that 401(k) plan managers should cautiously consider investments in Crypto Assets. In May of this year, that guidance was rescinded. As a result of this news, the prices of Bitcoin and Ethereum saw an increase.

401(k) plan is a retirement plan widely adopted by private sector employees in the United States, provided by employers with tax advantages. Employees can contribute a portion of their pre-tax salary into the 401(k) account, and employers usually offer a certain percentage of matching contributions. In 2025, the IRS sets the employee voluntary contribution limit at $23,500, with an additional $7,500 for those aged 50 and over.

Currently, the market concentration of 401(k) platform providers in the United States is relatively high, with the top five providers controlling over 60% of the market assets. According to the Investment Company Institute (ICI) report, 401(k) plans hold $8.7 trillion in funds, with over 90 million Americans participating in employer-sponsored defined contribution plans. Among them, mutual funds manage assets of $5.3 trillion, accounting for 61%.

Opinions within the industry vary regarding this decision. Supporters believe that it will bring significant benefits to the Crypto Assets industry. Some analysts point out that if 401(k) pension funds invest 5% of their capital into Bitcoin, its value could reach $450 billion. However, there are also voices warning that this move may bring risks and challenges.

First, investment costs may affect returns. Private equity funds typically charge a management fee of 2% per year, plus 20% of the fund's profits. Secondly, related litigation cases may increase, as losses incurred by investors in private investments may lead to lawsuits against the managers. In addition, alternative assets such as private equity often lack liquidity, and investors' funds may be locked up for a long time.

Despite the executive order being signed, major 401(k) providers such as Fidelity and Vanguard still need to develop suitable products, a process that may take several years. Overall, this decision brings new opportunities and challenges to the U.S. retirement savings market, and its long-term effects remain to be seen.