Experts Say Trump’s 401(k) Crypto Order Opens Doors but Real Change Will Take Time

President Donald Trump’s Aug. 7 executive order to allow cryptocurrencies in 401(k) retirement plans is being described as a milestone for mainstream adoption. Still, experts warn that actual changes could take years due to regulatory and administrative challenges.

The order directs agencies such as the U.S. Department of Labor (DOL) to update rules under the Employee Retirement Income Security Act (ERISA) – the federal law governing retirement plans and requiring employers to act in employees’ best interests.

In May, the DOL rescinded a Biden-era guidance letter that had effectively prohibited U.S. retirement plans from adding crypto investments.

Currently, most Americans’ retirement plans comprise stocks and bonds, so adding crypto is a big change. However, altering ERISA’s rules and creating new investment products is a complex and slow process, experts say. John Crossman, managing principal at Vex Securities, warned that the impact on crypto demand is likely to be limited in the near to medium term because of this.

“In most normal circumstances, such as a 401(k) plan offered by one’s employer, the employer takes on obligations under ERISA, which might discourage the addition of a crypto track in one’s annual choices,” Crossman said. “Almost all employers will outsource the administration of their plan to large financial institutions to benefit from existing investment offerings that can meet the retirement needs and risk tolerances of the employees[.]”

Crossman added that, unlike the lifting of the ban on Bitcoin exchange-traded funds (ETFs), this development is “unlikely to open up new investment flows.”

‘Massive Wave of Capital’

Other experts argued that the potential scale of new capital flowing into crypto and private equity through 401(k) plans is significant. Mauricio Di Bartolomeo, co-founder of Ledn, pointed out that as of Q3 2024, 401(k) plans in the U.S. held an estimated $8.9 trillion in assets. This is roughly 9-11% of the total U.S. stock market value, he said.

“This unlocks a massive wave of capital to potentially invest in bitcoin and other alternative assets, further legitimizing the asset class,” Di Bartolomeo said. “It’s becoming easier and easier for all classes of investors to buy or gain exposure to bitcoin, and this trend shows no signs of slowing down.”

Di Bartolomeo added that he expects more governments to follow the U.S. in making Bitcoin “increasingly more accessible to its local investor base.”

BTC is currently trading at around $121,140, with a market capitalization of over $2.38 trillion.

Tom Bruni, vice president of community at Stocktwits, echoed Di Bartolomeo’s view, saying the move could unlock trillions more for the crypto industry, both directly and indirectly. He noted that total U.S. retirement assets stood at $43.4 trillion at the end of Q1 2025, with $12.2 trillion (about 28%) in defined contribution plans such as 401(k)s and 403(b)s.

As Bruni noted, that’s roughly three-fourths of the size of the U.S. individual retirement account market, which is $16.8 trillion in assets.

“With that said, certain providers of these accounts still limit crypto exposure, even through ETFs and other traditional vehicles,” Bruni added in comments shared with The Defiant:

This executive order follows other recent pro-crypto signals from the Trump administration, including a separate debanking executive order aimed at stopping financial discrimination against crypto users.

Meanwhile, earlier last week, the U.S. Commodity Futures Trading Commission (CFTC) revealed plans for an initiative to enable trading of spot crypto asset contracts on futures exchanges registered with the agency.