Retirement savers in the US will soon be able to passively invest in Bitcoin for their nest eggs.
President Donald Trump on Thursday signed an executive order directing the Labor Department to make it easier for private equity, real estate, cryptocurrencies, and other alternative assets to be included in 401(k) retirement plans.
It could channel fresh flows of billions of dollars into digital assets via regulated investment products like spot Bitcoin exchange-traded funds.
The roughly $8 trillion held in 401(k) accounts, according to 2024 estimates by Bitwise, is one of the largest untapped markets for crypto exposure. Bloomberg estimates this number today to be even higher — around $12.5 trillion.
While most portfolios remain concentrated in stocks and bonds, the policy shift opens the door for plan sponsors to offer funds linked to Bitcoin and other private assets.
Even a modest allocation could have a market impact. Bitwise’s Head of Research, Ryan Rasmussen, noted that just a 3% allocation of 401(k) assets to crypto would amount to about $240 billion in inflows.
When factoring in its 60% market dominance, this equates to around $144 billion into Bitcoin alone.
Those sums would be chasing a market where the liquid Bitcoin supply is already feeling a squeeze.
Data from analytics firm CryptoQuant show that Bitcoin reserves on centralised exchanges have fallen to about 2.5 million, their lowest level in about seven years.
At current prices, that’s only $300 billion worth.
If retirement-plan demand materialises through products like BlackRock’s iShares Bitcoin Trust, issuers will need to secure the underlying coins to cover fresh investments.
And ETFs aren’t the only competitor.
This also comes amid a growing trend of aggressive corporate treasury buying.
Firms such as Strategy and Japan’s Metaplanet have been making large-scale Bitcoin purchases for their balance sheets, often several times a month.
Data from Bitcoin Treasuries shows 164 public and private companies now hold close to 1 million Bitcoin worth over $116 billion, approaching 5% of the total max supply.
Kyle Baird is DL News’ Weekend Editor. Got a tip? Email at kbaird@dlnews.com.