Overnight, the Financial Times revealed a bombshell: US President Trump is preparing to sign an executive order allowing 401(k) retirement plans to invest in alternative assets such as cryptocurrencies, gold, and private equity.
According to three informed sources, the order will require regulatory agencies to re-examine current retirement investment restrictions, clearing obstacles for digital assets to enter the $8.7 trillion US retirement market.
This move is not without precedent. On May 28, the US Department of Labor revoked the Biden-era guidance of being "extremely cautious" about crypto assets, stating it was "regulatory overreach". Even earlier, in 2022, Republican Congressman Peter Meyer proposed the "Retirement Savings Modernization Act", attempting to incorporate digital assets into the 1974 Employee Retirement Income Security Act (ERISA), which, though not passed, laid the groundwork for today's policy shift.
Trump's Digital Asset Ambitions
The core intent of this executive order is to break the long-standing focus of 401(k) plans on traditional stocks and bonds, granting broader asset allocation flexibility.
The order will clearly instruct Washington's regulatory agencies to thoroughly investigate and remove existing barriers that prevent alternative assets, especially digital assets, precious metals, and funds focused on corporate mergers, private loans, and infrastructure transactions, from being included in 401(k) professionally managed funds.
The White House cautiously stated to the Financial Times: "President Trump is committed to restoring prosperity for ordinary Americans and securing their economic future. However, any decision should only be considered official policy after the President himself formally announces it." Nevertheless, this statement does not obscure the strong signal of the Trump administration's push to mainstream cryptocurrencies.
In fact, this is a continuation of Trump's series of pro-crypto policies. From promising during his campaign to liberate digital currencies from "overly harsh regulation", to his family enterprise—Trump Media & Technology Group—investing over $2 billion in digital currencies like Bitcoin, and even launching his own stablecoin and other digital tokens, Trump has become a heavyweight player in the digital asset field, with his personally disclosed crypto asset holdings already exceeding $51 million.
His administration has already taken action, with the Department of Labor revoking in May the Biden-era policy discouraging 401(k) plan managers from offering cryptocurrency investment options, paving the way for this executive order.
Interpretation: The Deep Significance of Opening the US Pension Market
To comprehend the potential impact of this policy, one must examine the structure and scale of the US retirement market. As one of the world's largest pension systems, the US retirement market has a total scale of $9 trillion.
Specifically, according to public data, as of March 31, 2025, the total assets of all employer-led defined contribution (DC) retirement plans have reached $12.2 trillion. Among these, the most notable 401(k) plan holds $8.7 trillion.
These massive funds primarily come from tens of millions of American working-class individuals. The 401(k) plan, as an employer-sponsored occupational retirement plan, is the core of long-term savings for most working families due to its attractiveness of payroll deductions, tax benefits, and employer matching contributions.
Traditionally, these massive retirement funds have primarily flowed into publicly traded securities. As of the end of March 2025, $5.3 trillion (61%) in 401(k) plans is managed by mutual funds. Among these, equity funds, with $3.2 trillion, are the most common type, followed by hybrid funds (including target-date funds) managing $1.4 trillion. It is this asset allocation status dominated by stock and bond mutual funds that provides broad space for the "ice-breaking" alternative investments promoted by Trump.
IRA (Individual Retirement Accounts) offers individuals more autonomous retirement savings choices. These wealth accumulations by ordinary Americans constitute the massive "patient capital" that drives US economic growth and financial market stability.
Compared to China's pension system, the similarities lie in their efforts to build a multi-layered guarantee. China's "enterprise/occupational annuity" is similar to the US 401(k) in its employer-sponsored nature, while "personal pensions" are more akin to the individual self-directed investment model of IRA. Therefore, this US move to open retirement fund investments has global significance in terms of its impact on the wealth allocation concepts of the general public.
Private Equity Giants and New Opportunities: Redistribution of Trillion-Dollar Cake
Beyond cryptocurrencies, this executive order represents a potential feast for the world's largest private equity groups like Blackstone, Apollo, and BlackRock. These giants have largely pinned their future growth hopes on managing funds from ordinary retirement savers. The executive order will require the Department of Labor to consider providing a "safe harbor" mechanism for retirement plan managers to reduce legal risks when offering high-fee, low-liquidity, and less transparently valued private investments to savers.
Private equity groups predict that successfully entering the 401(k) retirement plan market could attract hundreds of billions of dollars in new industry assets.
To this end, they have proactively established partnerships with major asset management companies: Blackstone has joined forces with Vanguard, Apollo and Partners Group are providing investment services for major 401(k) plan sponsor Empower, and BlackRock has begun collaborating with retirement savings plan third-party management institution Great Gray Trust.
As federal-level policies are being developed, some state governments have already begun pilot programs. Bi Tui previously reported that North Carolina legislators proposed a bill allowing retirement funds to allocate up to 5% of their balance to cryptocurrencies. Retirement systems in Michigan and Wisconsin have also actually invested in spot Bitcoin and Ethereum ETFs, and these local practices provide a reference for federal-level policies.
Headwinds Remain
In terms of legislation, the U.S. House of Representatives passed three important cryptocurrency-related bills on Thursday local time: the CLARITY Act, the GENIUS Act, and the Anti-CBDC Surveillance National Act. Among these, the CLARITY Act and the Anti-CBDC Surveillance National Act will be sent to the Senate for review. The GENIUS Act is expected to be signed into law by President Trump on Friday local time. This marks substantial progress in Congress's push for cryptocurrency legislation, providing a clearer legal framework for industry development.
However, even with legislative positive signals, the market still faces challenges. Palisade co-founder Mantan Dave warned that if the United States fails to establish a clear and consistent regulatory framework, businesses may redirect funds and innovation to markets with more explicit rules. Moreover, investing retirement savings in illiquid private assets is not without risks, with inherent high fees, high overall leverage rates, and lower asset valuation transparency being factors that regulators and investors need to carefully consider.
When Trump's executive order meets the $9 trillion retirement market, this experiment may redefine the meaning of "retirement savings" - will it allow ordinary people to share technological dividends in the digital age? Or will it expose retirement funds to new risks? The answer may depend on how regulators find a balance between innovation and protection.
