The Trump administration has suspended 401(k) crypto rules, eliminating the Biden-era Department of Labor’s limits. In a move on May 28, 2025, the Department officially revoked guidance that had suggested employers to practice digital “extreme care” before allowing digital assets like Bitcoin, NFTs, and meme coins into retirement plans.
The change affects $8.9 trillion in U.S. 401(k)s. CNBC explains the previous policies discouraged investors from investing in cryptocurrency in retirement plans because there was heightened risk of theft, scams, and volatility. The Trump Labor Department now states that it is “neither endorsing nor disapproving” employers’ offering crypto as an investment opportunity within a 401(k), once again taking its stance on neutrality.
What the New 401(k) Crypto Rules Mean to Investors
Restoration of 401(k) crypto rules is an indicator pointing towards the transformation in the handling of digital assets under retirement plans. The plan fiduciaries and employers now have more leeway to take into account the addition of crypto investments. The Department of Labor, however, made clear that this action does not demonstrate support for cryptocurrency.
Bitwise estimates that if only 1% of U.S. 401(k) assets flowed into Bitcoin, it would equate to $80 billion of new demand. That is approximately twice as much that has flowed into Bitcoin ETFs since their inception. To put this into context, the price of Bitcoin almost doubled from $36,000 to $72,000 following U.S. spot ETF launches in early 2024. Bitcoin appreciated by nearly 180% up to May of 2025, trading comfortably above $110,000 before correcting.
Stephen Hall, a Better Markets regulatory attorney, cautions that regulations under Biden could have protected millions of people from losing vast amounts of money during the 2022 “Crypto Winter.” The collapse of Terra Luna and a string of crypto bankruptcies froze billions of dollars in assets that highlighted lingering risks.
Industry Responses and Ongoing Threats to Investors
Certain reactions to the new crypto 401(k) rules differ. Certain retirement plan experts, like Philip Chao (Experiential Wealth), posit that treating crypto as any other asset does not always raise eyebrows. Employers are still under their fiduciary responsibility to make decisions on the savers’ behalf. Adding crypto can still bring them into litigation problems if investments do not function properly.
Others, including Institute for the Fiduciary Standard’s Knut Rostad, consider the move a “big mistake.” He argues removing the “yellow caution light” will cause investors to think crypto is more secure than it is.
Market-wise, Glassnode analysis places Bitcoin’s potential target at the $120,000 level if 401(k) flows drive buying pressure intensely. Uncertainty is fueled by leveraged longs and flash move potential, however.
