U.S. rule change could funnel retirement money into crypto, private equity and real estate
The U.S. Department of Labor has proposed a rule that would make it easier for 401(k) plans to include alternative investments — from cryptocurrencies and other digital tokens to private equity and real estate. The move is a direct response to President Donald Trump’s August executive order asking the Labor Department and the SEC to expand investors’ access to nontraditional asset classes inside retirement accounts.
“This proposed rule will show how plans can consider products that better reflect the investment landscape as it exists today,” Labor Secretary Lori Chavez-DeRemer said, signaling a shift away from the long-standing 401(k) focus on stocks and bonds. If adopted, the change would give plan sponsors and recordkeepers clearer guidance on adding private-market funds and tokenized assets that don’t trade on public exchanges.
Regulatory background
- Last May the Labor Department rescinded prior guidance that had urged fiduciaries to exercise “extreme care” before placing crypto in retirement plans.
- The new proposal builds on that rollback and the White House directive to treat digital assets alongside other investment options.
Why it matters for crypto
U.S. 401(k) plans collectively hold trillions of dollars in retirement savings. Even a modest reallocation — for example, a large plan directing 1% of its portfolio to bitcoin — could channel millions of dollars into crypto funds or tokens, creating meaningful new institutional demand. The rule would also accelerate the development of custody, compliance and product solutions aimed at getting retirement money into digital assets and other private-market investments.
Criticism and risks
The proposal has drawn pushback from some lawmakers and advisors who worry about exposing retirees to illiquid, volatile or opaque investments. Senator Elizabeth Warren criticized the timing and breadth of the change, saying it risks “expos[ing] workers to losses while benefiting large financial firms.” Concerns center on fiduciary duty, valuation challenges for private assets, and the potential for increased fees or concentrated risk in workers’ retirement portfolios.
What’s next
The Labor Department’s rule is a proposal and must go through the public comment period and further regulatory steps before taking effect. If finalized, it would mark a significant evolution in how retirement plans are constructed — and could open a new, large source of capital for crypto and private-market managers while forcing plan sponsors to weigh liquidity, custody and disclosure issues more carefully.
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