401(k) Assets Near $9 Trillion—How Much Could Flow into Crypto?
On Thursday, August 7, President Donald Trump signed an executive order allowing Americans to allocate 401(k) retirement savings to cryptocurrencies, private equity, real estate, and other alternative assets. The order instructs:

• Within 180 days, the Department of Labor (DOL) to reassess its guidance on fiduciary duties when 401(k) and other defined-contribution plans invest in alternatives.

• The Secretary of Labor to clarify the DOL’s stance on alternatives and outline proper fiduciary procedures for asset-allocation funds that include them.

• The Secretary of Labor, in coordination with the Treasury Secretary, the SEC, and other regulators, to determine whether parallel regulatory reforms are needed.

• The SEC to amend rules and guidance so participant-directed defined-contribution plans can access alternatives more easily.

The order explicitly groups cryptocurrencies with alternative assets and opens the door to their inclusion in 401(k) menus. The DOL had previously warned plan fiduciaries to “exercise extreme care” before adding crypto; that guidance was fully rescinded in May. Markets responded immediately: Bitcoin rose nearly 2 % in 24 hours, and Ethereum jumped more than 7 %.

Opening a $9 Trillion Retirement Pool to Crypto Exposure
America’s retirement system has three pillars:

1. Social Security, providing basic income.

2. Employer-sponsored plans—of which the 401(k) is the most common for private-sector workers.

3. Individual retirement arrangements and private annuities.

A 401(k) is a tax-advantaged, employer-sponsored plan funded primarily by employee salary deferrals, often matched by the employer (e.g., a 6 % employee contribution plus a 3–6 % employer match). For 2025, the IRS elective-deferral limit is $23,500, with an extra $7,500 catch-up for workers 50 and older. Participants choose from a menu of investment funds and bear the investment risk. Withdrawals before age 59½ typically incur a 10 % penalty plus ordinary income tax.

The 401(k) platform market is highly concentrated: the top five providers—Fidelity, Empower, Vanguard, Principal, and ADP—control more than 60 % of assets. Fidelity, Empower, Principal, and Voya operate integrated models that combine record-keeping, investment management, and proprietary funds. Vanguard and BlackRock focus chiefly on investment management.

According to the Investment Company Institute’s June 2025 report, 401(k) plans hold $8.7 trillion, serving over 90 million Americans. Of that, $5.3 trillion (61 %) sits in mutual funds: $3.2 trillion in equity funds, $1.4 trillion in hybrid funds, and the remainder in bond and money-market funds.

Cheers from Crypto, Caution from TradFi
Allowing crypto into 401(k)s clearly raises risk, yet the industry is celebrating.

• Geiger Capital notes that with $9 trillion in 401(k) assets, a 5 % Bitcoin allocation would amount to $450 billion—against Bitcoin’s $2 trillion market cap.
• Tom Dunleavy of Varys Capital points out that most Americans divert 1–10 % of every paycheck into their 401(k)s, traditionally 60 % stocks / 40 % bonds. “If crypto suddenly becomes a 5 % slice, hundreds of billions will flow in over the next few years.”
• Ryan Rasmussen of Bitwise calls the order “another signal that the regulatory thaw in crypto is ongoing” and expects “tens or even hundreds of billions” to enter the asset class as plan providers respond.

Traditional finance is more circumspect:

• Fees may erode returns. Private-equity funds typically charge 2 % management fees plus 20 % of profits. Morningstar’s Jason Kephart warns that higher costs, added complexity, and reduced transparency could hurt investors.
• Litigation risk rises. Stifel’s Brian Gardner expects lawsuits if participants lose money in illiquid alternatives.
• Liquidity concerns. Private equity can lock up capital for years, making it hard for 401(k) investors to rebalance or raise cash.
• Product rollout will take time. Even though the order is signed, major providers such as Fidelity and Vanguard still need to design suitable offerings—an effort that could span years before broad adoption.

401(k) Assets Near $9 Trillion—How Much Could Flow into Crypto?
On Thursday, August 7, President Donald Trump signed an executive order allowing Americans to allocate 401(k) retirement savings to cryptocurrencies, private equity, real estate, and other alternative assets. The order instructs:

• Within 180 days, the Department of Labor (DOL) to reassess its guidance on fiduciary duties when 401(k) and other defined-contribution plans invest in alternatives.

• The Secretary of Labor to clarify the DOL’s stance on alternatives and outline proper fiduciary procedures for asset-allocation funds that include them.

• The Secretary of Labor, in coordination with the Treasury Secretary, the SEC, and other regulators, to determine whether parallel regulatory reforms are needed.

• The SEC to amend rules and guidance so participant-directed defined-contribution plans can access alternatives more easily.

The order explicitly groups cryptocurrencies with alternative assets and opens the door to their inclusion in 401(k) menus. The DOL had previously warned plan fiduciaries to “exercise extreme care” before adding crypto; that guidance was fully rescinded in May. Markets responded immediately: Bitcoin rose nearly 2 % in 24 hours, and Ethereum jumped more than 7 %.

Opening a $9 Trillion Retirement Pool to Crypto Exposure
America’s retirement system has three pillars:

1. Social Security, providing basic income.

2. Employer-sponsored plans—of which the 401(k) is the most common for private-sector workers.

3. Individual retirement arrangements and private annuities.

A 401(k) is a tax-advantaged, employer-sponsored plan funded primarily by employee salary deferrals, often matched by the employer (e.g., a 6 % employee contribution plus a 3–6 % employer match). For 2025, the IRS elective-deferral limit is $23,500, with an extra $7,500 catch-up for workers 50 and older. Participants choose from a menu of investment funds and bear the investment risk. Withdrawals before age 59½ typically incur a 10 % penalty plus ordinary income tax.

The 401(k) platform market is highly concentrated: the top five providers—Fidelity, Empower, Vanguard, Principal, and ADP—control more than 60 % of assets. Fidelity, Empower, Principal, and Voya operate integrated models that combine record-keeping, investment management, and proprietary funds. Vanguard and BlackRock focus chiefly on investment management.

According to the Investment Company Institute’s June 2025 report, 401(k) plans hold $8.7 trillion, serving over 90 million Americans. Of that, $5.3 trillion (61 %) sits in mutual funds: $3.2 trillion in equity funds, $1.4 trillion in hybrid funds, and the remainder in bond and money-market funds.

Cheers from Crypto, Caution from TradFi
Allowing crypto into 401(k)s clearly raises risk, yet the industry is celebrating.

• Geiger Capital notes that with $9 trillion in 401(k) assets, a 5 % Bitcoin allocation would amount to $450 billion—against Bitcoin’s $2 trillion market cap.
• Tom Dunleavy of Varys Capital points out that most Americans divert 1–10 % of every paycheck into their 401(k)s, traditionally 60 % stocks / 40 % bonds. “If crypto suddenly becomes a 5 % slice, hundreds of billions will flow in over the next few years.”
• Ryan Rasmussen of Bitwise calls the order “another signal that the regulatory thaw in crypto is ongoing” and expects “tens or even hundreds of billions” to enter the asset class as plan providers respond.

Traditional finance is more circumspect:

• Fees may erode returns. Private-equity funds typically charge 2 % management fees plus 20 % of profits. Morningstar’s Jason Kephart warns that higher costs, added complexity, and reduced transparency could hurt investors.
• Litigation risk rises. Stifel’s Brian Gardner expects lawsuits if participants lose money in illiquid alternatives.
• Liquidity concerns. Private equity can lock up capital for years, making it hard for 401(k) investors to rebalance or raise cash.
• Product rollout will take time. Even though the order is signed, major providers such as Fidelity and Vanguard still need to design suitable offerings—an effort that could span years before broad adoption.