Donald Trump Set To Sign Executive Order That Will Open Crypto To 401(k) Investors, Bloomberg Says

President Donald Trump plans to sign an executive order that will allow for American 401(k)s to invest in crypto, real estate and private equity.

According to a Bloomberg report that cited sources familiar with the matter, the executive order will direct the Labor Department to clear a path for 401(k)s to invest in those alternative assets.

Labor Secretary Lori Chavez-DeRemer will have to revisit Employee Retirement Income Security Act guidance and coordinate with agencies such as the Securities and Exchange Commission (SEC) and Treasury Department on possible rule changes to permit the investments. 

Americans Could Soon Gain Exposure To Bitcoin ETFs

The executive order could also unlock exposure to spot Bitcoin ETFs (exchange-traded funds) for 401(k) investors. 

Up until now, institutional investors have been increasing their crypto exposure, with spot BTC ETFs recording over $53.7 billion in net inflows since their launch in January last year, data from Farside Investors shows. 

However, everyday savers have been restricted due to regulatory uncertainty, volatility concerns and fiduciary risk.

About 71.5 million Americans have 401(k) pension plans, and, as of September last year, the market stood at $8.9 trillion. As such, the executive order could be a major step towards mainstream crypto adoption that channels billions of dollars into the digital asset market.

Before that can happen, however, plan sponsors will most likely still need to assess volatility, custody and valuation risks. 

Trump’s possible executive order comes after the US Labor Department rescinded Biden administration guidance that imposed limits on what 401(k) retirement plans could invest in.

US Making Crypto Regulatory Headway

If Trump does sign the executive order, it would be the latest pro-crypto move by his administration. 

Since entering the White House for a second term in January, Trump has signed the GENIUS Act into law, which establishes guidelines for stablecoin issuers in the US to follow.

The SEC has also unveiled its “Project Crypto” initiative, which seeks to ease licensing requirements for US crypto firms. 

Earlier this week, the US Commodity Futures Trading Commission (CFTC) kicked off its “crypto sprint” initiative as well when it said it will begin exploring spot crypto trading on futures exchanges.