SEC Should Consider Allowing Crypto in Retirement Funds
Members of the U.S. Congress are urging the Securities and Exchange Commission (SEC) to expedite cryptocurrency access for 401(k) retirement plans. This could unlock over $100 billion in long-term investor demand.
Recently, nine lawmakers wrote to SEC Chair Paul Atkins requesting a faster process for implementing crypto investments in 401(k) plans. The request referenced former President Donald Trump’s August order on “Democratizing Access to Alternative Assets.”
A group of House Financial Services Committee lawmakers, led by French Hill, emphasized that digital assets should be recognized for inclusion in retirement plans, urging the SEC to clarify regulations on crypto investments.
Reversing Previous Crypto Restrictions
This initiative follows the Labor Department guidance that previously cautioned fiduciaries against crypto in retirement plans, which was reversed in May. Legislators highlighted that plan members should have access to alternative assets, provided fiduciaries determine that inclusion improves net risk-adjusted returns.
Other members of this group include Frank D. Lucas, Warren Davidson, Marlin Stutzman, Andrew R. Garbarino, Michael V. Lawler, Troy Downing, and Mike Haridopolos.
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Potential Market Impact
If implemented, the $9.3 trillion U.S. 401(k) market could see a tidal wave of funding into crypto exchange-traded products (ETPs). Even 1% allocation from 401(k) funds could channel $93 billion into digital assets, surpassing the $60.6 billion inflows into Bitcoin ETFs since January 2024.
Several public pension funds have already invested in cryptocurrencies:
- State of Michigan Retirement System purchased 460,000 shares of the Grayscale Ethereum Trust (ETHE) worth approximately $15.6 million last quarter.
- Earlier in 2025, the State of Wisconsin Investment Board divested from the BlackRock iShares Bitcoin Trust ETF as part of portfolio adjustments.
