How soon will crypto creep into your 401(k)? New rules being explored now

The U.S. Securities and Exchange Commission, the Labor Department and the Treasury are tasked now with working out regulatory details for paving the way for alternative investments, including cryptocurrency, to be offered in 401(k) plans.

Ultimately, 401(k) investors could get access to cryptocurrency, private equity and other alternative investments in retirement savings plans at work, thanks to an executive order signed by President Donald Trump on Aug. 7.

Trumps says 401(k) options have been stifled

In his executive order, Trump blamed "regulatory overreach and encouragement of lawsuits filed by opportunistic trial lawyers" for stifling investment options, such as crypto, in 401(k)s.

One argument being made by Trump and bitcoin backers is that alternative investments already are part of the mix for traditional pension plans. Why not 401(k) plans, too?

Trump's executive order pointed out that alternative investments, including cryptocurrency, are "an increasingly large portion of the portfolios of public pension and defined-benefit retirement plans."

Michigan's largest public pension plan, for example, held approximately $44 million in bitcoin and $30 million in ethereum exchange traded funds as of Sept. 10, totaling $74 million. 

The cost basis was $37.5 million, meaning the Michigan Retirement System nearly doubled its original investment with a gain of $36.5 million to date.

Yet, the combined holdings represent a fraction of 1% of the retirement system's total $115 billion portfolio. "Cryptocurrency is not a big focus of our investment strategy," said Ron Leix, a spokesman for the state treasury.

Leix pointed out that the state's retirement system was recognized by NASDAQ eVestment as having one of the best five-year returns among large public pension plans in the United States as of June 30.

Detroit's 'Bitcoin Butcher' and others welcome change

Not surprisingly, those who are bullish on bitcoin and other cryptocurrencies applaud what they see as a new opportunity to enable everyday investors to expand their horizons.

Bitcoin is a digital currency, launched in 2009, that can be used to buy goods or services with relative anonymity and without the need for a central authority, such as a bank or government. Devotees say the value comes from the scarcity, as bitcoin’s algorithm caps the supply at 21 million digital coins.

Ronnie Bedway, known as the "Bitcoin Butcher" on social media platforms, says the ability to own bitcoin and other cryptocurrency in a 401(k) plan will open the doors to more investors, particularly young savers, to what's likely to be a burgeoning area.

As people shop at Ronnie’s Meats, Ronnie Bedway, 36, of Waterford, the third-generation owner of Ronnie’s Meats in Eastern Market, poses for a portrait on Friday, Sept. 12, 2025. Bedway, known as "Bitcoin Butcher" on social media, talks about his bitcoin journey.

Bedway is a third-generation owner of Ronnie's Meats in Eastern Market in Detroit. For a Detroit trivia night point, Ronnie's made a name 50 years ago during the "Corned Beef War" with Wigleys in Eastern Market. Tens of thousands of pounds of brisket were sold at deep discounts in the friendly battle in 1975.

Ronnie's Meats was named after the founder, the young Ronnie Bedway's grandfather, who opened the butcher shop in 1967. Tom Bedway is the son of the founder and father of the "Bitcoin Butcher."

Bedway, 36, started studying bitcoin in 2017, the original blockchain and cryptocurrency. But Bedway didn't first invest in bitcoin until 2020 when bitcoin was trading at roughly $7,000. Some friends from college bought into the bitcoin story, including as an inflation hedge. Bedway also had been impressed after listening to podcasts by Michael Saylor, entrepreneur and bitcoin evangelist.

"Gold wasn't sexy enough," Bedway said.

Back in 2017, Bedway said, many people probably just logged into the Coinbase website to buy bitcoin via the crypto exchange platform. Now, there's an exchange traded product called IBIT or the iShares Bitcoin Trust ETF or some investors buy stock in companies that leverage their corporate balance sheet to invest in cryptocurrency.

He has been focusing lately on former bitcoin mining companies that are now reallocating their power to artificial intelligence, like Iren Limited and Cipher Mining.

"I am 36," Bedway said, "I can take a few more chances that maybe average investors are unwilling to do and kind of wait for the thesis to play out."

Some crypto enthusiasts say that the president's executive order is only a response to what many people already want.

For years, many workers have been questioning why bitcoin isn't being offered in their retirement plans, according to Elizabeth Hansson, president of the Stand with Crypto Michigan Chapter and chief technology officer of Blockchain Exploration Corp.

"This is very much the future of money. Digital assets will be incorporated into every aspect of our financial life in the near future," Hansson said.

"And people are starting to see this."

The executive order, she said, will give employers the option to add alternative investments, like cryptocurrency, to the mix of investments in a 401(k) plan.

Hansson said adoption won’t happen overnight because the regulatory process still needs to unfold. The Aug. 7 executive order, she said, directs the Department of Labor in coordination with the SEC and Treasury to reexamine fiduciary guidance, propose new rules and potential safe harbors, and issue clarifications within 180 days.

After that, investment firms will develop compliant products and employers will update their plans.

"I expect some employers — especially those with younger, tech-savvy workforces — will move quickly once the framework is in place, and more will follow as guardrails and education build confidence," Hansson said.

Employers, she said, will still decide what makes sense for their workers.

She likes to refer to Trump's executive order as "permissive, not prescriptive."

"It opens the door without pushing anyone through it," Hansson said.

Holding cryptocurrency in a 401(k) could have potential tax advantages. A traditional 401(k) would allow pretax contributions to grow on a tax-deferred basis for years; taxes are paid based on ordinary income tax rates when the money is withdrawn in retirement. Holding the investment in a Roth 401(k) would allow qualified withdrawals to be taken tax-free.

Hansson estimates that some 1 million people likely own cryptocurrency already in Michigan, though, no exact figure exists.

The advocacy group Stand With Crypto has more than 45,000 engaged crypto advocates in Michigan, she said, with high concentrations in Oakland County, Wayne County and the Grand Rapids area.

Will the United States be the 'crypto capital' one day?

Make no mistake, we're talking about what's been a wild, unfolding shift in acceptance. Trump, once a well-known crypto skeptic, now has promised to make the United States the “crypto capital of the world."

We've read plenty of headlines indicating how Trump and his family have embraced crypto in a variety of ways. Early in September, American Bitcoin, the crypto-mining company co-founded by Eric Trump, went public and began trading on the Nasdaq stock exchange.

Days after the executive order was signed, bitcoin hit an all-time high in trading of $124,457 on Aug. 14. Much of the rally kicked off in late 2024 on the theory that a second Trump administration would offer a friendly, regulatory environment for cryptocurrencies.

What goes up has gone down, plenty of times

Having cryptocurrency available as an option in a 401(k) plan would make it even easier to say "why not" and take a chance on investing in bitcoin and other cryptocurrency. But experts warn that the risks for sudden, dramatic drops in price remain.

The highly volatile investment isn't for the faint of heart.

Dramatic, double-digit fallouts have taken hits more than once. Bitcoin crashed by 84% in just one year, for example, from December 2017 to December 2018 when bitcoin closed at $3,815 on Dec. 30, 2018.

Right now, bitcoin has been riding high.

In the past 12 months alone, Bitcoin has doubled in value since it closed at $58,127.01 on Sept. 12, 2024. Bitcoin closed at $116,394.70 on Sept. 12, 2025.

High fees, high risks aren't for everyone

Most of us, of course, aren't investing in bitcoin and aren't even sure how bitcoin works. Unlike a dollar bill, you cannot pull a bitcoin out of your pocket.