President Trump is poised to sign an executive order this week that will allow American retirement savers to invest their 401(k) funds in a range of alternative assets, including cryptocurrencies like Bitcoin, precious metals such as gold, and private equity options. According to a report by Financial Times, this directive aims to break the traditional constraint that has limited 401(k) portfolios to publicly traded stocks and bonds.
The order will instruct federal agencies to identify and eliminate regulatory and logistical obstacles preventing these non-traditional assets from being incorporated into professionally managed retirement funds.
The Trump administration has already reversed a key Biden-era rule in May—instructing the Department of Labor to remove its discouragement of cryptocurrency in retirement plans, making way for these changes.
Why Crypto Is Central
The move is part of a broader strategy by Trump to bring cryptocurrencies into the mainstream. He has openly credited the crypto sector with supporting his 2024 election victory and has backed several crypto-related bills in Congress. Most recently, the House passed measures such as the GENIUS Act and CLARITY Act, signalling strong bipartisan momentum to regulate stablecoins and crypto assets.
With these legislative gains and relaxed enforcement under his watch, Trump is signalling that crypto is no longer a fringe asset but one deserving a place in retirement savings—a move that aligns political messaging with financial policy.
Private Equity and Bullish Backing
Allowing 401(k) plans to allocate funds to private equity or infrastructure deals would benefit behemoths like Blackstone, Apollo, and BlackRock. These firms have long viewed the nearly $9 trillion retirement market as a major growth frontier.
The order also proposes safe‑harbour provisions to shield plan administrators from legal liability for offering such investments, which tend to be less liquid, higher-fee, and carry harder-to-value assets.
Blackstone has already moved in, partnering with Vanguard; Apollo and Partners Group have teamed up with Empower; while BlackRock is active with Great Gray Trust. These private capital players predict that opening 401(k)s to their funds could channel hundreds of billions of dollars into their portfolios.
Risks and Expert Warnings
Financial experts caution that integrating private equity into mass retirement plans is not without hazard. They point out that these assets are illiquid, costly, opaque in valuation, and may not suit the average investor’s profile.
Concerns include impractical exit mechanisms, reduced transparency, higher fees, and leveraged positions that retail investors may not fully understand or be prepared for.
The heavier fees and lack of daily trading typical of private equity and crypto contrast sharply with the simplicity and clarity of traditional stock and bond mutual funds.
Broader Economic and Regulatory Context
This executive order represents the culmination of a suite of recent initiatives that seek to legitimize crypto and private markets in the eyes of regulators. Earlier this month, Congress passed the Genius Act to oversee stablecoins. Meanwhile, Trump has eased enforcement actions against major cryptocurrency trading platforms.
With legislative and executive support now aligned, the infrastructure is being built to support retail access to assets once reserved for institutional investors.
