Trump’s 401(k) Revolution: Bitcoin Could Soon Be Part of Your Retirement Plan

Wall Street's old guard just felt a tremor—your 401(k) might soon moon with Bitcoin exposure.

The policy pivot no one saw coming

A White House memo leaked this morning hints at executive action allowing crypto allocations in tax-advantaged accounts. The move would let retirement portfolios ride Bitcoin's volatility—for better or worse.

Why traditionalists are sweating

Pension funds still treat crypto like a dot-com bubble sequel, but the administration's play could force trillions in institutional capital off the sidelines. Early drafts suggest capped allocations (5-10%) to "hedge against monetary debasement"—a not-so-subtle dig at the Fed.

The fine print that matters

Custody solutions from Coinbase and Fidelity appear baked into the proposal. Think cold storage with 401(k)-level compliance—and the fee structures to match. Because nothing says 'financial revolution' like 75 basis points in annual custody charges.

This either jumpstarts mainstream adoption or creates the most spectacular retirement fund wipeout since 2008. Place your bets.

Widening the pool of investors

Despite Bitcoin's meteoric rise during the past decade, the digital asset has not been as accessible as, say, a highly liquid blue-chip stock. That's due to a number of reasons ranging from skepticism about cryptocurrencies to regulations that made it difficult for mainstream financial institutions and investors to hold crypto.

Official WHITE House Photo by Joyce N. Boghosian.

Obviously, a lot of that has changed in recent years, and even more so since Trump took office. Trump's administration has removed many of the regulatory barriers standing between the financial industry and crypto, and this latest executive order could release a flurry of new buyers for bitcoin and other digital assets.

"That's a monster pool of capital. What we're seeing ... [is] the aperture of being able to buy crypto being widened and widened, [and] more avenues bringing people into the tent,"Chief Executive Officer Michael Novogratz said during an interview on CNBC. "When it becomes commonplace -- when you can do it at the place you've already been doing business with, if its Fidelity or T. Rowe Price or whoever it is -- you just pull more people into this ecosystem."

More than 71 million Americans had access to a 401(k) account at the end of 2023, according to an analysis by Capitalize, a provider of digital rollover solutions for retirement accounts. According to the Investment Company Institute, 401(k) plans held $8.7 trillion of assets at the end of the first quarter of 2025.

While some 401(k) plans can already invest in cryptocurrencies, adoption has been low. The Government Accountability Office in a report at the end of last year said that based on survey data, investments in crypto are "less than 1 percent of the 401(k) market, whether measured by plans, participants, or assets."

Should Bitcoin be in your 401(k)?

I certainly think there is a case to be made for owning some Bitcoin in your retirement portfolio. Many investors now view Bitcoin and its finite amount of 21 million coins as a FORM of digital gold, and therefore a way to hedge inflation and other types of volatility. Whether it's true remains to be seen, but gaining as much widespread acceptance as it has is an accomplishment in its own right. Additionally, Bitcoin stands to benefit as a wider pool of buyers, both institutional and perhaps from 401(k) account holders, is introduced to the coin.

That said, I WOULD caution investors from investing too much of their account in Bitcoin or any crypto asset. The sector is still only about 15 years old and there is still a lot we need to learn about digital assets. They are still extremely difficult to value, given that they don't produce cash flow or earnings, meaning they still could continue to be volatile.

Last year,issued a report suggesting that investors could allocate as much as 2% of their capital in a multi-asset portfolio to Bitcoin, which feels about right. The main benefit of owning Bitcoin is that it could potentially offer a unique form of diversification. However, 401(k) investors don't need to be taking on excessive risk, as the power of compounding through long-term investing provides a safe, proven method for accumulating wealth.