Trump Opens the Door for Crypto and Private Equity Investments in 401(k) Retirement Plans
August 7, 2025 — CBS/AP
In a major development for retirement investing, President Donald Trump signed an executive order on Thursday that could eventually allow millions of Americans to include higher-risk assets such as private equity and cryptocurrencies within their 401(k) accounts.
Expanding Investment Options in Retirement Plans
Although the executive order does not immediately alter current retirement investment options, it directs federal agencies—including the Department of Labor—to revise existing regulations governing employer-sponsored 401(k) plans. These changes could enable plans to offer a wider spectrum of investment choices, particularly in alternative asset classes like private equity, cryptocurrencies, and real estate. Experts estimate that the regulatory rewriting process may take several months or longer before new options become available to workers.
Currently, most 401(k) plans focus primarily on traditional mutual funds that invest in stocks and bonds. Since the inception of 401(k) plans, these mainstream asset classes have been central to retirement saving. However, the private equity industry—which manages about $5 trillion in assets and primarily invests in private companies—has long sought the opportunity to compete for capital within these plans. Likewise, the cryptocurrency sector, energized by strong support from crypto executives during Trump’s 2024 campaign, views this move as a pathway to broader mainstream acceptance.
Industry Perspectives and Market Reactions
Cory Klippsten, CEO of Swan Bitcoin, highlighted the significance of the development: “It was inevitable that Bitcoin would make its way into American 401(k)s. As fiduciaries recognize Bitcoin’s risk-adjusted upside over the long term, we expect growing allocations, particularly among younger, tech-savvy workers seeking ‘hard money’ rather than volatile assets.”
The prospect of tapping into retirement assets worth trillions of dollars has been welcomed by investment firms. TIAA, which manages retirement funds for educators and academics, expressed support in an emailed statement to CBS MoneyWatch. The firm noted, “We believe end investors can benefit from the advantages that private investments can offer when embedded within professionally managed vehicles like target date funds or guaranteed annuity products.” BlackRock, a major investment giant, also endorsed the measure for broadening investment strategies available to workers.
The Regulatory and Practical Road Ahead
President Trump’s executive order instructs federal regulators to reconsider what qualifies as permissible 401(k) investments under the Employee Retirement Income Security Act of 1974 (ERISA). This law mandates that retirement investment options must be in the best interest of employees, not the financial industry.
Most Americans’ retirement portfolios are composed of stocks, bonds, cash, and some commodities like gold. Expanding this range to include private equity and cryptocurrencies represents a substantial shift. However, after the new regulations are finalized, it will take time for major retirement plan providers—including Fidelity, Vanguard, and T. Rowe Price—to develop suitable fund products. Employers, too, may be cautious about quickly adding these higher-risk assets. As a result, it may take several years before such alternatives become a mainstream feature of 401(k) plans.
Cryptocurrency’s Unique Position
Bitcoin’s popularity among younger investors has steadily grown since its creation nearly two decades ago. Notably, the price of bitcoin rose 2% to $116,542 on the day of the executive order signing and has nearly doubled since Trump’s 2020 election. Still, federal regulators under the Biden administration had handled cryptocurrencies with “extreme care” due to their well-known volatility—cryptos frequently experience daily swings of 10% or more, far exceeding typical stock market movements.
Cryptocurrency companies, which donated millions to Trump’s campaign and events, view ERISA qualification as critical to wider acceptance. Coinbase, a leading U.S. crypto exchange and major Trump donor, recently benefited from the Securities and Exchange Commission dropping its lawsuit against the company in contrast to the Biden administration’s approach that treats many cryptocurrencies as securities.
Private Equity’s Long-Term Ambitions
Private equity funds have traditionally relied on wealthy investors and pension plans with long investment horizons. Gaining access to 401(k) assets—owned by millions of American workers—would open a vast, new capital resource. Industry leaders like Blackstone CEO Steve Schwarzman have publicly called the opportunity to tap into retirement savings funds a “dream.”
Earlier administrations, both Republican and Democratic, had previously aligned against including private equity in 401(k) plans due to concerns over risk, fees, and liquidity. This latest directive by President Trump marks a significant policy shift that could reshape retirement investing.
As this policy evolves through regulation and market adaptation, Americans may eventually see a broader array of investment choices within their retirement plans, blending traditional security with alternative assets like crypto and private equity. For now, the change remains a prospect, signaling a new frontier in retirement savings strategy.
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