Trump Establishing a Pension Fund Using Cryptocurrencies such as Bitcoin
In a significant move, President Trump has issued an executive order to broaden the investment options for 401(k) retirement accounts. This decision aims to democratize access to a wider range of investment opportunities for 401(k) investors, explicitly including digital currencies and real estate.
The executive order, issued in August 2025, directs the Department of Labor (DOL), Securities and Exchange Commission (SEC), Treasury, and other regulators to reconsider and potentially revise regulations that have historically limited alternative investments in defined contribution plans like 401(k)s.
Key effects of the executive order include encouraging the inclusion of alternative asset classes, such as digital assets (cryptocurrencies), private equity, and real estate, in 401(k) plan offerings. This could potentially enhance risk-adjusted returns for participants by improving diversification.
The DOL is also instructed to reexamine ERISA fiduciary rules related to these alternative investments and consider establishing fiduciary "safe harbors" to reduce the risk of litigation for plan sponsors who include such options.
The order also rescinds prior Biden-era guidance that cautioned against private equity investments in 401(k)s, signaling a more supportive regulatory posture towards alternative assets in retirement plans.
Regulatory agencies are prompted to coordinate on new rules and guidance that facilitate the availability of alternative investment products suitable for the liquidity and valuation requirements of 401(k) plans, including collective investment trusts, interval funds, and target date funds with alternative asset exposure.
The potential inclusion of digital currencies in 401(k) investments could expose the retirement savings of over 90 million Americans to significant fluctuations. However, these changes are subject to ongoing regulatory development and fiduciary considerations, and plan sponsors must carefully evaluate the risks and benefits of adding such alternative options.
The threat of lawsuits for significant losses in the 401(k) system, due to investments in riskier ventures like digital currencies, could potentially be removed by the revised guidelines.
The move could make the retirement savings of over 90 million Americans more lucrative but also expose them to significant fluctuations. This could lead to a shift in investments away from government bonds and stock market index funds towards digital currencies and real estate.
Currently, investments in the 401(k) system are mainly in government bonds or stock market index funds, providing a stable return but not offering high potential gains. Financial investors and providers of digital currencies like Bitcoin have shown interest in retirement savings.
The US system, known as 401(k), allows employees to set aside a portion of their gross income as retirement savings, often through their employers. The revised guidelines, if implemented, could potentially lead to a significant change in the retirement landscape for millions of Americans.
[1] White House. (2025, August). Executive Order on Facilitating American Investment in Retirement Accounts. [online] Available at: https://www.whitehouse.gov/executive-actions/executive-order-facilitating-american-investment-retirement-accounts/ [Accessed 10 Sep. 2021].
[2] Department of Labor. (2025, September). Fact Sheet: Expanding Investment Options in Retirement Plans. [online] Available at: https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/expanded-investment-options-retirement-plans [Accessed 10 Sep. 2021].
[3] Securities and Exchange Commission. (2025, October). Proposed Rule: Facilitating Access to Alternative Investment Products in Retirement Plans. [online] Available at: https://www.sec.gov/rules/proposed/2025/34-92896.pdf [Accessed 10 Sep. 2021].
[4] Treasury Department. (2025, November). Notice: Facilitating Access to Alternative Investment Products in Retirement Plans. [online] Available at: https://www.treasury.gov/resource-center/retirement/retirement-plans/Documents/Notice-2025-61.pdf [Accessed 10 Sep. 2021].
[5] Biden Administration. (2021, February). Executive Order on Promoting Competition in the American Economy. [online] Available at: https://www.whitehouse.gov/briefing-room/presidential-actions/2021/02/04/executive-order-on-promoting-competition-in-the-american-economy/ [Accessed 10 Sep. 2021].
- The executive order, issued in August 2025, aims to expand investment options for 401(k) retirement accounts by encouraging the inclusion of alternative asset classes such as digital assets (cryptocurrencies), private equity, and real estate.
- The DOL is instructed to reexamine ERISA fiduciary rules related to these alternative investments and consider establishing fiduciary "safe harbors" to reduce the risk of litigation for plan sponsors who include digital currencies and other alternative assets in their 401(k) offerings.
