[Bitcoin Now] Trump Allows Bitcoin Investment in U.S. 401k... Market Cheers

Executive Order Eases Regulations
Allows Investment in Virtual Assets and Private Equity Funds
Bitcoin and Ethereum Rally Together

Yonhap News

On August 7 (local time), U.S. President Donald Trump eased regulations to allow virtual assets and private equity funds to be included in the country’s representative retirement account, the 401k, causing a stir in the virtual asset market.

On this day, President Trump signed an executive order directing the Department of Labor to review guidelines on alternative asset investments in retirement accounts within six months. As a result, the U.S. Securities and Exchange Commission (SEC) and the Department of the Treasury have begun reviewing amendments to related regulations.

Of particular note is that this executive order includes a requirement for the government to clarify its position on fiduciary responsibility when offering asset allocation funds that include alternative assets. This means that the order eases the “fiduciary responsibility” that has long been considered an obstacle.

Typically, alternative assets are characterized by high risk and high returns, complex structures, and low liquidity, which has raised concerns among fiduciaries about potential lawsuits. President Trump appears to have included these provisions and created clear guidelines to encourage investment in alternative assets. The Block, a digital asset-focused media outlet, evaluated the move as “the Trump administration’s strongest attempt yet to incorporate digital assets into U.S. retirement policy.”

Currently, more than $12 trillion in assets are deposited in U.S. retirement plans, of which $9 trillion is managed through 401k accounts alone, according to The Washington Post. Until now, a significant portion of defined contribution (DC) retirement plans had been invested in stocks and bonds, but with this change, investment options are expected to diversify and expected returns may increase.

The virtual asset market, which is expected to benefit from this measure, reacted immediately. According to U.S. virtual asset exchange Coinbase, as of 10 a.m. (Korean time) on this day, Bitcoin was trading at $117,057, up 1.90% from 24 hours earlier. Compared to a month ago, this is an 8.94% increase, and compared to a year ago, it is up 92.3%. However, this is still lower than last month, when Bitcoin surpassed $120,000 and set new record highs. Major altcoins (virtual assets other than Bitcoin), such as Ethereum, rose by more than 6%, while Ripple (XRP) (10.94%) and Solana (3.90%) also showed similar strength.

The private equity fund market also welcomed the move. Traditional and alternative asset management companies see the retirement account market as a next-generation growth sector and are reportedly aiming for full-scale entry following this measure. This is because many institutional investors, such as U.S. pension funds and university endowments, have faced limits on private equity fund investments, making the inflow of new funds urgent for asset managers.

However, there has also been criticism of this measure. Bloomberg News pointed out, “Supporters argue that this move will diversify investment options for retirement savers and open up the potential for higher returns,” adding, “However, high fees and risk burdens will follow, and pension administrators may be exposed to the risk of lawsuits.”