Lawmakers Urge SEC to Align 401(k) Rules With Trump Order as Bitcoin Could See Significant Inflows

• Lawmakers urged SEC Chair Paul Atkins to align rules with Trump’s executive order expanding 401(k) crypto access.

• Analysts estimate a 1% crypto allocation in 401(k)s could generate roughly $93 billion in new capital.

• Pension approaches vary: Michigan added Bitcoin and Ethereum exposure while Wisconsin sold its Bitcoin ETF holdings.

401(k) crypto access: Lawmakers press the SEC to adopt Trump’s order to let retirement plans include crypto—learn implications and next steps for investors.

What is 401(k) crypto access and why are lawmakers urging the SEC to act?

401(k) crypto access refers to allowing defined-contribution retirement plans to offer regulated cryptocurrency products as investable options. Nine U.S. lawmakers asked the SEC to align rules with President Trump’s August executive order so fiduciaries can add crypto without regulatory conflict.

How could the SEC implement Trump’s executive order for 401(k) crypto access?

The SEC can coordinate with the Department of Labor to revise guidance that currently limits alternative asset inclusion by fiduciaries. Proposed steps include clarifying custody standards, permitting regulated spot crypto products, and issuing model plan language. Analysts estimate a 1% allocation could drive ~$93B into crypto-focused products.

How is the SEC being asked to change retirement rules?

In a September 22, 2025 letter to SEC Chair Paul Atkins, lawmakers led by Rep. French Hill and Rep. Ann Wagner urged the SEC to work with the Department of Labor. They requested revisions to guidance that restricts alternative assets and sought clarity so fiduciaries can expand plan menus without violating securities or labor rules.

The lawmakers emphasized that regulatory alignment is necessary to implement the president’s directive titled “Democratizing Access to Alternative Assets for 401(k) Investors,” and to reduce legal uncertainty for plan sponsors and trustees.

How large is the 401(k) market and what are the potential inflows?

The U.S. 401(k) market totals approximately $9.3 trillion. Analysts estimate that if plans allocated just 1% to crypto-related products, that could equate to about $93 billion of new capital flowing into the sector.

For context, spot Bitcoin ETFs have drawn roughly $60.6 billion since January 2024, making the 1% 401(k) projection materially larger than that cumulative ETF inflow.

Why are pension funds showing mixed approaches to crypto?

State pension systems are split: the Michigan Retirement System increased exposure—adding $10.7 million in ARK 21Shares Bitcoin ETF and holding Grayscale Ethereum Trust shares worth about $15.6 million—while Wisconsin’s pension board sold its position in BlackRock’s iShares Bitcoin Trust.

These differing moves illustrate institutional uncertainty and varied risk appetites despite the political push to broaden investor access.

Frequently Asked Questions

Will 401(k) plans immediately be allowed to add crypto options?

Not immediately. The SEC would need to issue clarifying guidance and possibly update custody and disclosure rules before widespread plan adoption can occur.

How soon could changes affect average investors?

Changes depend on regulatory coordination; if guidance is updated within months, plan sponsors could begin offering crypto options within a year, subject to fiduciary reviews and plan amendments.

Key Takeaways

• Regulatory push: Nine lawmakers want the SEC to align rules with the president’s executive order to expand 401(k) crypto access.
• Market impact: A 1% crypto allocation across 401(k)s could unlock roughly $93B in new capital.
• Institutional split: State pension activity is mixed, underscoring varied approaches to long-term crypto exposure.

Conclusion

Lawmakers are urging the SEC to enable broader 401(k) crypto access by harmonizing agency guidance with the president’s executive order. If regulators act, retirement plans could add regulated crypto options, potentially mobilizing significant capital—investors and fiduciaries should monitor guidance updates and compliance standards closely.

Nine U.S. lawmakers urged the SEC to implement Trump’s executive order allowing 401(k) investors broader access to crypto assets.

• Lawmakers asked SEC Chair Paul Atkins to align regulations with Trump’s order expanding crypto access in 401(k) retirement plans.
• Analysts estimate a 1% crypto allocation in 401(k)s could generate $93B inflows, surpassing Bitcoin ETF totals since 2024.
• Pension funds remain split, with Michigan expanding Bitcoin and Ethereum holdings while Wisconsin exited its crypto ETF positions.

Published: 2025-09-24 | Updated: 2025-09-24 | Author: COINOTAG