Nikolas Sargeant
The US Department of Labor has proposed a rule change that would open the door to cryptocurrency and other alternative investments in 401(k) retirement plans, advancing a directive from President Trump's August executive order instructing the Labor Department, SEC, and Treasury to expand retirement investment options.
The proposal, titled "Fiduciary Duties In Selecting Designated Investment Alternatives," appeared on the Federal Register on Monday. It outlines the factors retirement plan managers should weigh when considering crypto and alternative assets for client portfolios, defining digital assets as a new form of investing encompassing cryptocurrencies such as Bitcoin and other tokens that can be stored and transmitted digitally.
Labor Secretary Lori Chavez-DeRemer said the rule would show how plans can consider products that better reflect today's investment landscape, framing broader diversification as a win for American workers and retirees. SEC Chair Paul Atkins echoed the sentiment, calling expanded access to innovative, long-term investments a critical priority for effective retirement planning.
The proposal has significant implications for the digital asset sector. Unlocking even a fraction of US retirement capital — which runs into the trillions — would represent a major expansion of institutional participation in crypto markets.
For context on how much exposure is appropriate, Wall Street's largest firms have been cautious. Morgan Stanley suggested allocations of 2% to 4% for crypto within client portfolios in October, while BlackRock recommends a more conservative 1% to 2% for well-diversified accounts.
The proposal is open for public comment before any rule is finalized.
