On August 7, 2025, US President Donald Trump signed an executive order allowing cryptocurrencies in 401(k) retirement plans, a move seen as a win for crypto adoption. This order directs regulators to evaluate investment restrictions on several asset groups including crypto, potentially unlocking a significant capital influx into the crypto market. While the integration of crypto may increase demand and drive prices upward, experts caution about the substantial risks involved. Concerns include high fees associated with alternative investments compared to average 401(k) fees, and the inherent volatility of cryptocurrencies. Critics argue that investing in crypto within retirement plans poses fiduciary risks due to potential substantial losses. They advocate for clearer regulatory standards and updates to 401(k) infrastructure to accommodate digital assets safely. Despite the potential for diversification and exposure to innovation, experts suggest alternatives like brokerage accounts or self-directed IRAs for crypto investments, warning that traditional retirement plans might not be suitable for such volatile assets.

Source 🔗