In 2022, the Biden administration’s retirement plan regulators placed a warning sign on cryptocurrencies, urging plan overseers to exercise “extreme care” before making digital coins available inside 401(k) plans.
“Cryptocurrencies are very different from typical retirement plan investments,” the Labor Department noted at the time, “and it can be extraordinarily difficult, even for expert investors, to evaluate these assets and separate the facts from the hype.”
The Trump administration’s regulators have decided to rescind this guidance.
The Labor Department, which oversees retirement plans, said on May 28 that it would adopt a neutral stance toward crypto, neither endorsing nor disapproving of plan managers who decide to include digital assets on 401(k) investment menus.
“The Biden administration’s Department of Labor made a choice to put their thumb on the scale,” said Lori Chavez-DeRemer, the labor secretary. “We’re rolling back this overreach and making it clear that investment decisions should be made by fiduciaries, not D.C. bureaucrats.”
The shift is not surprising given the Trump administration’s enthusiastic embrace of the crypto industry, even if President Trump and his family’s crypto dealings have raised ethical questions with little precedent in presidential history.
But the reversal is not expected to set off a rush to load crypto alternatives inside the more than 715,000 401(k) retirement plans, which held about $8.9 trillion in assets at year’s end, according to the Investment Company Institute. Retirement plan administrators — who must act solely in the best interest of the participating employees — are still responsible for choosing prudent investment options. Many fear being sued for far more conservative choices than crypto, plan experts say, and so far, the appearance of digital assets inside 401(k)s has been minimal.
“Marketers have described crypto as a diversifier, currency hedge, inflation hedge and a safe haven. So far, it hasn’t lived up to those billings,” said Bryan Armour, director of passive strategies research for North America at Morningstar. “Crypto tends to tank when stocks drop. That said, it has paid off for investors that could stick through the tough times.”
Access to digital currencies is easier for the crypto-curious these days. Somewhat surprisingly, Fidelity, one of the largest 401(k) providers, helped forge that pathway as an early entrant into the market. In 2022, the company introduced a digital asset account to hold Bitcoin, enabling participants to wager a slice of their 401(k) retirement money if their employer allowed it.
But those accounts were quickly overshadowed by the advent of exchange-traded products that hold crypto, which makes access to digital coins as simple as buying shares of stock.
Ali Khawar, a former deputy assistant secretary at the Labor Department who helped formulate the regulatory guidance under President Biden, said the Trump administration’s revised stance didn’t relieve fiduciaries of their responsibilities. But now, he said, employers will need to make sense of digital assets on their own, without the benefit of guidance from the government.
“If they don’t do their due diligence correctly, when this volatile asset class takes its next dip, they’re going to be exposed to lawsuits from savers who rightly wonder whether they should have been given this option in the first place,” Mr. Khawar said. “That’s not good for them, and it’s not good for the savers they’re supposed to look out for.”
Mr. Biden’s regulators didn’t go as far as banning crypto from retirement plans when they issued a compliance assistance document in 2022, but it reminded plan overseers of their responsibilities to ensure investments were prudent, and strongly suggested that cryptocurrencies did not yet appear to meet that bar, citing significant risks of fraud, theft and loss.
Since then, increasingly mainstream crypto vehicles have proliferated outside workplace retirement plans. Last year, several established players, including BlackRock and Fidelity, introduced investment funds that hold Bitcoin and were designed to track the digital coin’s price. Those 11 spot Bitcoin exchange-traded funds have collected $126 billion in assets since they began trading in January 2024, according to Morningstar, and have returned 123 percent since then. Spot Ethereum E.T.F.s followed soon after, but they attracted far less in new investment dollars.
These products are not entirely out of reach to 401(k) investors, or at least those whose workplace plans provide access to a self-directed brokerage window. That gives retirement plan investors access to a broader universe of products that in some cases include E.T.F.s.
About 26 percent of plans offer a brokerage window, though they are more likely to be available with larger plans, according to the Plan Sponsor Council of America, part of the American Retirement Association. When employees in workplace plans invest through the window, their employer’s fiduciary duty to choose prudent investments does not necessarily extend to what the participant chooses to invest in there.
There are already nearly 70 crypto asset investment options potentially available to 401(k) participants, according to a November study by the Governmental Accountability Office, the investigative arm of Congress.
At least that many new exchange-traded products that track lesser known digital currencies are on the way. And more than 70 filings for new crypto funds await approval at the Securities and Exchange Commission, according to Morningstar, for digital coins ranging from Solana to Dogecoin.
“Whether there is investor demand for this long menu of crypto E.T.F.s is another story,” Mr. Armour said.
Most of those coins are unlikely to find their way to plans’ investment menus. “Unlike stocks or bonds, crypto isn’t backed by earnings, cash flow or expected future returns,” said Dustin Suttle, a certified financial planner in Scottsdale, Ariz. “Its value hinges entirely on supply and demand, which makes it especially vulnerable to hype cycles and sentiment shifts.”
The Trump administration’s sentiments were on display last week when Vice President JD Vance gave the keynote address at the Bitcoin 2025 conference in Las Vegas, praising the industry and ticking off the many reasons he believed crypto, digital assets and particularly Bitcoin should be cemented as part of the mainstream economy.
“Crypto is a hedge against bad policymaking from Washington,” Mr. Vance said, “no matter what party’s in control.”
At the same time, President Trump and his family’s growing stake in the industry has created conflicts of interest that have not just pushed boundaries but largely ignored them. He is marketing digital currencies to the public while appointing regulators who are softening enforcement, including the dismissal of lawsuits and pending investigation of crypto companies.
The retreat on regulatory guidance is not expected to significantly change plan administrators’ take on their fiduciary duty to their workers, which obliges them to act in their sole interest.
“This D.O.L. shift may open the door procedurally — it shouldn’t be perceived as lowering the bar,” said Emily Jaffe, president of OFC Wealth Management in Short Hills, N.J. “Most prudent fiduciaries I know are still keeping that door closed.”
Tara Siegel Bernard writes about personal finance for The Times, from saving for college to paying for retirement and everything in between.
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