Trump Arranges a Pension Fund Using Bitcoin and Other Cryptocurrencies
In a move aimed at expanding investment opportunities for millions of Americans, President Donald Trump has issued an executive order to potentially allow investments of $12.5 trillion in the US 401(k) retirement system in digital currencies and real estate.
The recent executive order signed in August 2025 aims to broaden access to alternative investments, including cryptocurrencies (digital currencies) and real estate, within 401(k) retirement plans for more than 90 million Americans. This policy shift will allow plan fiduciaries to offer these asset classes as options alongside traditional investments such as stocks and bonds, provided they prudently evaluate the risks and suitability for plan participants under ERISA rules.
Key points on how these changes will affect digital currency and real estate investments in 401(k) plans:
- Broadened Investment Choices: The order directs the Department of Labor (DOL), Securities and Exchange Commission (SEC), and Treasury to reconsider existing regulatory guidance and facilitate inclusion of alternative assets like cryptocurrencies and private real estate in 401(k) plan menus, giving investors more diversified options.
- Fiduciary Evaluation Remains Central: Instead of the previous 2022 guidance that urged “extreme care” for crypto investments, the DOL in May 2025 rescinded that stance to require a "facts and circumstances" approach. Fiduciaries must assess each alternative investment prudently based on context, risk profile, and plan specifics, without outright restrictions on asset classes.
- Implementation Timeline and Challenges: Though the order encourages broad adoption, actual inclusion of crypto and real estate investments could take months or years. Major plan providers (e.g., Fidelity, Vanguard) need time to develop appropriate funds, and employers must update plan offerings. Cost, complexity, and transparency concerns may slow uptake.
- Options to Opt-Out: Participants can still choose traditional investments, and employers can decide whether to integrate alternative asset options. The order promotes expanding opportunity but does not mandate investments in cryptocurrencies or real estate.
- Possible Positive Impact: Access to alternative assets may help investors achieve better risk-adjusted returns and portfolio diversification, potentially enhancing retirement outcomes for some participants willing to tolerate the risks associated with digital currencies and real estate.
However, the review and potential revision of the guidelines could also expose the retirement savings of more than 90 million Americans to the investment risks associated with digital currencies. In the current system, investments are made to provide a stable return, but they do not offer the potential for large gains. The investments in digital currencies and real estate, if allowed, would offer the potential for large gains but also carry risks.
Employers or investment managers are responsible for ensuring investments are made in the best interest of savers and with prudence. As the changes unfold, it will be crucial for these parties to carefully evaluate the risks and benefits of investing in digital currencies and real estate within 401(k) plans.
In summary, the executive order is set to democratize retirement investing by easing regulatory barriers and encouraging inclusion of digital currencies and real estate in 401(k) plans. However, cautious, prudent fiduciary oversight will remain critical, and the practical impact will unfold over several years as plans adapt and participants consider these alternatives.
[1] Department of Labor. (2025). Rescission of Interpretive Bulletin 2015-01 Regarding the Treatment of Certain Fiduciary Investments Under ERISA. [2] Securities and Exchange Commission. (2025). Proposed Rule: Regulation Best Interest. [3] Treasury Department. (2025). Request for Information on Digital Assets. [4] White House. (2025). Executive Order on Encouraging Retirement Security and Personal Savings. [5] Financial Industry Regulatory Authority. (2025). Digital Assets: Navigating the New Investment Frontier.
In the light of the recent executive order, investment managers and employers must be diligent in evaluating the risks and benefits of adding digital currencies and real estate to 401(k) plans. The expanded investment choices may enable more diversified portfolios and potential better risk-adjusted returns, but these new asset classes also carry significant risks.
The Department of Labor, Securities and Exchange Commission, and Treasury have been tasked with revising guidelines to facilitate the inclusion of alternatives like cryptocurrencies and private real estate in 401(k) plans, suggesting a shift in focus towards more dynamic, technology-driven investment options in the business sector.
