US Labor Proposal Opens 401k Door to Bitcoin

A new proposal from the US Department of Labor could make it easier for retirement plans to add Bitcoin and other digital assets. If adopted, the rule would give plan managers a clearer path to consider crypto inside 401(k) accounts, one of the biggest pools of long-term investment money in the United States.

Good to Know

• The proposal could open a 401(k) market worth about $10.1 trillion to crypto
• Plan managers would still need to review costs, liquidity, complexity, and performance
• A 60 day comment period now stands before any final rule is adopted

Crypto Gets Closer to the US Retirement Market

Rather than changing the market overnight, the proposal sets out how fiduciaries should review investment options when selecting products for retirement plans. Digital assets are described in the draft as a new form of investment that includes cryptocurrencies such as Bitcoin and other tokens that can be stored and transferred digitally.

For years, 401(k) menus mostly stayed centered on stocks and bonds. Under the new framework, plan managers could more openly weigh crypto and other alternative assets when building investment lineups for workers.

Lori Chavez-DeRemer, US Labor Secretary, said the proposal “shows how retirement plans can consider products that better reflect the current investment landscape.” She added that broader choice would be “a major win for American workers, retirees, and their families.”

Money is the real story here. Americans held about $10.1 trillion in 401(k) plans at the end of 2025, according to Investment Company Institute. One year earlier, that total stood at $9 trillion. Even a small shift toward Bitcoin could send large sums into the crypto market. A pension plan with tens of thousands of workers would only need a 1% Bitcoin allocation to direct millions of dollars into digital assets.

Wall Street has already been inching in that direction. In October, Morgan Stanley told its 16,000 financial advisers, who oversee $6.2 trillion, that they could recommend crypto investments to clients. The bank has pointed to a 2% to 4% allocation. BlackRock has taken a more cautious line with a 1% to 2% range.

Trump Order Sits Behind the Proposal

The draft rule follows an executive order signed by President Donald Trump in August. That order told the Department of Labor and the SEC to widen the path for retirement investments tied to alternative assets, including crypto.

SEC Chair Paul Atkins called it Monday “a crucial priority” to give US investors access to diversified investments that can tap innovation and economic growth.

The Labor Department also said retirement plan managers already had authority to consider alternative investments, but in practice very few had done so. Under the proposed rule, they would need to examine factors such as performance, fees, liquidity, and complexity before adding crypto products.

Criticism arrived quickly. Senator Elizabeth Warren warned that the plan could expose workers to risky assets.

“Now that cracks are appearing in the private credit market and crypto keeps falling, Trump decides that now is the time to stuff these risky assets into Americans’ 401(k)s,” Warren said.