How soon will crypto creep into your 401(k)? New rules being explored now

The challenge of managing 401(k) investments is about to get even more complex. With proposed regulatory changes on the horizon, 401(k) investors may soon face a host of new options—including the potential to invest in bitcoin or private equity—to enhance retirement outcomes.

Current discussions among the U.S. Securities and Exchange Commission, the Labor Department, and the Treasury are centered on introducing alternative investments, such as cryptocurrency, into 401(k) plans.

Under an executive order signed by President Donald Trump on August 7, 2025, investors might gain access to a range of alternative investments, including cryptocurrencies and private equity, within their workplace retirement plans.

President Trump attributed the stagnation of investment choices like crypto in 401(k)s to “regulatory overreach and lawsuits from opportunistic trial lawyers.”

Proponents of this initiative argue that traditional pension plans already incorporate various alternative investments, questioning why 401(k) plans shouldn’t follow suit.

The executive order emphasizes that alternative investments, including cryptocurrencies, constitute “an increasingly significant portion of the public pension and defined-benefit retirement portfolios.”

For instance, Michigan’s largest public pension plan reported holdings of approximately $44 million in bitcoin and $30 million in Ethereum exchange-traded funds as of September 10, 2025—effectively doubling its initial investment of about $37.5 million with a remarkable gain of $36.5 million to date. Nevertheless, these assets account for a mere fraction of the $115 billion total portfolio.

“Cryptocurrency is not a primary focus of our investment strategy,” remarked Ron Leix, a spokesperson for the state treasury. Despite this, Michigan’s retirement system has recently received recognition for having one of the top five-year returns among large public pension plans in the U.S. as of June 30.

Supporters of cryptocurrency are enthusiastic about this potential breakthrough, viewing it as a chance for everyday investors—especially younger individuals—to diversify their portfolios in exciting new ways.

Bitcoin, launched in 2009, offers a digital currency option enabling anonymous transactions without reliance on traditional banking systems or government regulation. Advocates emphasize its value lies in its scarcity, with the algorithm capping the total supply at 21 million coins.

Ronnie Bedway, known as the “Bitcoin Butcher,” believes that incorporating bitcoin and other cryptocurrencies into 401(k) plans will appeal to a broader spectrum of investors, particularly younger savers eager to explore this burgeoning financial landscape.

Bedway, at 36 years old, started following bitcoin in late 2017 but only began investing in 2020 when the price hovered around $7,000. He credits his decision to investments made by his college friends and enlightening podcasts by bitcoin advocates like Michael Saylor.

“Gold simply didn’t feel exciting enough,” Bedway said, reflecting on his views of traditional investments.

In 2017, newcomers often turned to Coinbase to buy bitcoin, while now there are diverse investment avenues such as the iShares Bitcoin Trust ETF and corporate stocks that leverage balance sheets to invest in cryptocurrencies.

Recognizing the potential of both cryptocurrencies and artificial intelligence, Bedway is also eyeing former bitcoin mining companies pivoting their resources towards AI-enhanced operations.

“There’s a lot of excitement surrounding my generation’s ability to take on more risk,” he explained, highlighting the diverging approaches younger investors may have compared to their older counterparts.

Many crypto advocates argue that the executive order reflects an ongoing desire for broader investment choices, especially as employees frequently question why their retirement plans lack access to bitcoin.

“This is the future of finance. Digital assets will soon be part of every financial transaction,” asserted Elizabeth Hansson, president of the Stand with Crypto Michigan Chapter and CTO of Blockchain Exploration Corp.

She expects that while it may take time for full adoption, initial movement will be from employers eager to cater to tech-savvy younger workers once regulatory frameworks are established.

Hansson commented, “This executive order encourages options without enforcing them.”

Holding cryptocurrency in a 401(k) could offer advantageous tax implications; traditional contributions would be tax-deferred, while a Roth 401(k) allows for tax-free withdrawals under certain conditions.

Despite estimates of about 1 million cryptocurrency holders in Michigan, as claimed by Hansson’s advocacy group, the adoption of such options in retirement plans will proceed with caution.

Trump, previously skeptical about cryptocurrencies, has made commitments to position the U.S. as the “crypto capital of the world.”

The interest in cryptocurrencies surged following Trump’s executive actions, with Bitcoin achieving an all-time high of $124,457 shortly thereafter—anticipated by speculation surrounding a welcoming regulatory climate under potential future administration policies.

Nevertheless, adding cryptocurrencies to 401(k) plans could complicate decisions for retirement savers, as price volatility remains a significant concern.

Bitcoin has exhibited dramatic fluctuations in its pricing history, including a notable drop of 84% from December 2017 to December 2018, showcasing the risks involved.

Currently, Bitcoin has shown a solid resurgence, having doubled in value over the past year, moving from $58,127.01 to $116,394.70.

While many individuals remain hesitant about entering the cryptocurrencies space, with a Gallup poll indicating that 60% of surveyed adults are uninterested in investing in crypto due to perceived risks, the conversation surrounding its inclusion in retirement plans grows increasingly complex.

Concerns regarding potential lawsuits address the ignorance surrounding high fees and liabilities linked to alternative investments. Experts urge caution, particularly for more vulnerable populations who might lack the financial agility required to weather significant losses.

Alicia Munnell from Boston College labels incorporating bitcoin into 401(k) plans a “terrible idea,” cautioning that participants might not fully comprehend the intricacies of cryptocurrency investments.

She and other financial experts advocate a cautious approach to adding alternative investments, underscoring the necessity for employees to weigh risk versus reward seriously before proceeding.

Ultimately, the prospect of integrating cryptocurrency and private equity into 401(k) plans invites a myriad of implications, and as new regulations emerge, both employers and employees must navigate this evolving landscape judiciously.

For personal finance questions, contact columnist Susan Tompor at stompor@freepress.com. Follow her on X @tompor.

This article originally appeared on Detroit Free Press: 401(k) savers could see new options, including bitcoin