Retiring on crypto
A new 401(k) order puts crypto in your retirement plan — access for all, or the financialization of everything?
On August 7, 2025, the president signed an executive order allowing 401(k) plans to include private equity, real estate, and digital assets like cryptocurrency. The administration calls it “democratizing access” to investments once reserved for institutions and high-net-worth investors.
But that leaves a pressing question: is this financial empowerment for the masses, or a hidden liability that will quietly eat into retirement savings?
The policy shift: Opening the gates
The executive order tasks regulators, including the Department of Labor and the SEC, with revising ERISA-era rules to clarify fiduciary responsibilities and reduce legal risks for plan managers who offer alternative investments.
The White House positions these assets as capable of delivering “competitive returns along with diversification benefits” to the more than 90 million Americans with employer-sponsored retirement accounts.
This policy move follows a string of crypto-friendly initiatives, from dismantling the DOJ’s crypto enforcement unit and scaling back SEC lawsuits major crypto companies, to establishing a Strategic Bitcoin Reserve and passing the GENIUS Act for stablecoin regulation. Retirement plans now look like the next frontier in the administration’s effort to fold crypto into mainstream finance.
Opportunity and upside: New terrain for the masses
In theory, adding private equity and crypto to 401(k) menus could improve diversification. These assets are not strongly correlated with stocks and bonds, meaning they might buffer a portfolio against traditional market swings. And because most workers select professionally managed or target-date funds, exposure could be added automatically without requiring complex allocation decisions from the individual investor.
Daniel McGlynn
For decades, high-net-worth individuals and public pension systems have been able to capture potential gains from private equity. This move promises to extend that same access to everyday retirement savers. If plan managers lean into the crypto side, we could see the rise of novel products like crypto-themed target-date funds, tokenized real estate allocations, and even onchain retirement vehicles.
The risk ledger: Volatility, fees, litigious waters
The hazards, however, are just as real. Crypto markets are notorious for extreme volatility. Bitcoin has suffered repeated drawdowns of more than 70 percent. A retiree starting withdrawals during one of those downturns could see savings depleted far faster than planned. Private equity’s risks are quieter but still sharp — illiquidity, long lock-up periods, and opaque valuations can all work against an investor’s timeline.
Fees are another red flag. While the average 401(k) fund costs about 0.26 percent annually, private equity typically follows the “2 and 20” model: 2 percent in management fees plus 20 percent of profits.
Those charges, combined with crypto trading costs, could eat a meaningful slice of returns. Transparency also becomes an issue — private funds don’t offer daily pricing like public stocks or bonds, and crypto trades 24/7, creating a valuation mismatch that can confuse participants.
Behavioral pitfalls are worth noting too. The more exotic the menu, the greater the temptation for investors to chase performance or time the market. Without strong guardrails and education, some could jeopardize their long-term retirement security.
And while the executive order attempts to reduce litigation risk for sponsors, ERISA’s fiduciary duty still applies. If a sponsor offers a crypto fund and it collapses, lawsuits remain a possibility.
Market and cultural ripple effects
The numbers alone suggest seismic implications. With $9–12 trillion in 401(k) assets, even a modest allocation to crypto or private equity could trigger substantial flows into these markets. Crypto’s cultural status could shift, moving from fringe curiosity toward a core component of mainstream investing.
Wall Street is already positioning itself. Firms like BlackRock, Apollo, Carlyle, and Empower are building products to capture this new demand. Lobbying efforts have paid off, and the resulting revenue from tapping into the retirement market could be enormous. But this will also trigger a political tug-of-war over regulatory jurisdiction, fiduciary standards, tax treatment, and consumer protections.
Where Open Money fits in
The 401(k) menu is becoming a microcosm of capital markets: private equity, real estate, crypto, all packaged and intermediated by the same institutions that dominate public equities and bonds.
That’s the paradox.
On one hand, exposure to crypto through a familiar, regulated account could give millions of savers at least a taste of digital assets without having to navigate wallets, seed phrases, or self-custody. On the other hand, funneling crypto through 401(k)s risks turning it into just another line item in a Wall Street product sheet — stripped of its original promise of open, permissionless, peer-to-peer money.
Daniel McGlynn
In an Open Money context, the question isn’t whether this is a good investment option. It’s whether this is the kind of integration that accelerates real Open Money adoption — or whether it’s the financial sector co-opting the optics of crypto without embracing the underlying technology or ethos.
If Bitcoin or tokenized assets are only experienced inside a tax-advantaged account, mediated by custodians and plan administrators, is that progress toward a decentralized future? Or is it the same playbook that turned “alternative” assets into a fee-generating machine for incumbents?
This executive order is worth watching not only for its impact on retirement portfolios, but for what it signals: the next stage in mainstreaming crypto is to make it indistinguishable from every other financial product. Whether that’s a bridge to genuine open money systems or a cul-de-sac of financialization will depend on what investors — and innovators — do with the access they’ve been given.