#打榜优质内容# A Brief Discussion on Trump's Executive Order - Allowing 401(k) Investments in Crypto Assets

U.S. President Trump took another significant action on Thursday by signing an executive order directing the Department of Labor to pave the way for investment in crypto assets, private equity, and other alternative assets for 401(k) retirement plans. This is not only another crypto-related policy during Trump's tenure but could also inject hundreds of billions in incremental funds into the crypto market, accelerating the mainstreaming of digital assets.

1. Core of the Executive Order:
Open the gate for retirement funds to invest in Crypto Assets
The key actions of this executive order include:
Breaking Investment Restrictions: Requesting the Department of Labor to revise rules to allow 401(k) plans (the most mainstream retirement savings tool in the U.S., covering about 80 million workers, with a total size exceeding $8 trillion) to include Crypto Assets as investment targets;
Inter-departmental collaboration: Refers to the cooperation of agencies such as the SEC and the Treasury in implementing measures, which may involve the formulation of details related to Crypto Assets valuation, custody security, etc.;
Expand the scope of investors: Consider adjusting the definition of "qualified investors" to allow more ordinary citizens to participate in crypto investments through retirement plans, lowering the barriers to entry.
This policy echoes Trump's previous push for the "Establishment of a Bitcoin Strategic Reserve," continuously reinforcing his vision of "making the United States the capital of Crypto Assets."

II. Market Impact: How much incremental increase can 80 trillion dollars in retirement funds bring to Crypto Assets?
401(k) The scale of the fund for the plan can be described as a "massive reservoir". Even if only 1% is allocated to Crypto Assets, it will bring an increment of 8 billion USD, equivalent to about 3% of the current total market value of Bitcoin (calculated at the current Bitcoin price).
The specific impact may manifest in:
Institutional funds are entering the market at an accelerated pace: The allocation demand from retirement plans will compel traditional financial institutions (such as Fidelity, Vanguard, and other asset management giants) to launch crypto-related products, such as Bitcoin ETFs and Crypto Assets portfolio funds;
Market Stability Improvement: Retirement funds focus on long-term allocation, and their entry may reduce short-term volatility in the crypto market, lessening the characteristics of a "speculative market."
Crypto Assets Valuation Restructuring: Being included in retirement plans means that crypto assets receive "long-term asset" certification, which may attract more conservative investors and push up the valuation center of mainstream crypto assets.
3. Disputes and Challenges: Risk Prevention and Control is Key
Despite the policy sending positive signals, the market still worries about two major issues:
Volatility Risk: The annual volatility of the prices of Crypto Assets such as Bitcoin often exceeds 60%, while retirement funds pursue stable appreciation. How can one balance returns and risks? The Department of Labor may require limits on the proportion of encryption allocations (e.g., a single fund should not exceed 5%) or only allow investment in highly compliant targets (such as Bitcoin and Ethereum);
Lack of regulatory guidelines: There are currently no unified standards for the custody, valuation, and anti-money laundering of Crypto Assets, and if the rules are not complete, it may lead to disputes over fund security. For example, how does the plan 401(k) ensure that Crypto Assets are not stolen by hackers? How to deal with the risk of exchange collapse?

However, the Trump administration clearly prefers a "first open, then regulate" approach, breaking down policy barriers through executive orders and then forcing regulatory details to be implemented, which is consistent with the overall idea of promoting crypto innovation in the United States.
From Bitcoin strategic reserves to the 401(k) plan being unleashed, the Trump administration is gradually integrating Crypto Assets into the core of the U.S. financial system. When retirement funds, considered the "most conservative money," start flowing into the crypto market, it not only signifies that the mainstreaming of digital assets has crossed a critical threshold, but it may also reshape the flow of global crypto capital. Moving forward, the progress of the Labor Department's rule-making and the speed of institutional product rollouts will determine how lively this "retirement funds entering crypto" feast can be.