8-8-2025 – President Donald Trump signed an executive order on August 7, 2025, enabling 401(k) retirement plans to include alternative assets like cryptocurrency, private equity, and real estate. The move aims to diversify investment options for millions of American workers, potentially unlocking access to the $12.5 trillion retirement market for alternative asset managers.
The order directs the Department of Labor to revise regulations under the Employee Retirement Income Security Act, easing restrictions that previously limited such investments due to fiduciary concerns. Proponents argue this could yield higher returns and better diversification, especially for younger savers. Major firms like BlackRock, already planning crypto-inclusive retirement funds for 2026, stand to benefit, as do cryptocurrency markets, with Bitcoin rising 2% to $116,542 on the news. However, investor advocates warn of significant risks.
Jerry Schlichter, a prominent attorney specializing in 401(k) litigation, highlighted the volatility and unproven track record of cryptocurrencies, noting their unsuitability for retirement portfolios that prioritize stability. “Cryptocurrencies lack long-term performance history and exhibit extreme volatility,” Schlichter said. Private equity, similarly, carries high fees and lower transparency compared to traditional stock index funds, which have historically delivered reliable long-term growth.
The executive order does not immediately alter 401(k) options; regulatory changes and employer adoption could take months or years. Critics, including Senator Elizabeth Warren, have raised concerns about inadequate investor protections and potential litigation risks for plan sponsors.
