Key Points
Some 401(k) accounts can already buy cryptocurrencies.
However, available data suggests most 401(k) assets are not invested in cryptocurrencies like Bitcoin.
There’s debate about how much, if any, Bitcoin should be in a retirement account.
10 stocks we like better than Bitcoin ›
As if President Donald Trump’s administration hasn’t been supportive enough of the crypto sector, Trump recently signed an executive order that would let 401(k) accounts invest in alternative investments including real estate, cryptocurrencies, and private equity. This could prove to be a significant tailwind for crypto, particularly Bitcoin (CRYPTO: BTC), the world’s largest cryptocurrency. Should Bitcoin be in your 401(k)? Let’s take a look.
Widening the pool of investors
Despite Bitcoin’s meteoric rise during the past decade, the digital asset has not been as accessible as, say, a highly liquid blue-chip stock. That’s due to a number of reasons ranging from skepticism about cryptocurrencies to regulations that made it difficult for mainstream financial institutions and investors to hold crypto.
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Official White House Photo by Joyce N. Boghosian.
Obviously, a lot of that has changed in recent years, and even more so since Trump took office. Trump’s administration has removed many of the regulatory barriers standing between the financial industry and crypto, and this latest executive order could release a flurry of new buyers for Bitcoin and other digital assets.
“That’s a monster pool of capital. What we’re seeing … [is] the aperture of being able to buy crypto being widened and widened, [and] more avenues bringing people into the tent,” Galaxy Chief Executive Officer Michael Novogratz said during an interview on CNBC. “When it becomes commonplace — when you can do it at the place you’ve already been doing business with, if its Fidelity or T. Rowe Price or whoever it is — you just pull more people into this ecosystem.”
More than 71 million Americans had access to a 401(k) account at the end of 2023, according to an analysis by Capitalize, a provider of digital rollover solutions for retirement accounts. According to the Investment Company Institute, 401(k) plans held $8.7 trillion of assets at the end of the first quarter of 2025.
While some 401(k) plans can already invest in cryptocurrencies, adoption has been low. The Government Accountability Office in a report at the end of last year said that based on survey data, investments in crypto are “less than 1 percent of the 401(k) market, whether measured by plans, participants, or assets.”
Should Bitcoin be in your 401(k)?
I certainly think there is a case to be made for owning some Bitcoin in your retirement portfolio. Many investors now view Bitcoin and its finite amount of 21 million coins as a form of digital gold, and therefore a way to hedge inflation and other types of volatility. Whether it’s true remains to be seen, but gaining as much widespread acceptance as it has is an accomplishment in its own right. Additionally, Bitcoin stands to benefit as a wider pool of buyers, both institutional and perhaps from 401(k) account holders, is introduced to the coin.
That said, I would caution investors from investing too much of their account in Bitcoin or any crypto asset. The sector is still only about 15 years old and there is still a lot we need to learn about digital assets. They are still extremely difficult to value, given that they don’t produce cash flow or earnings, meaning they still could continue to be volatile.
Last year, BlackRock issued a report suggesting that investors could allocate as much as 2% of their capital in a multi-asset portfolio to Bitcoin, which feels about right. The main benefit of owning Bitcoin is that it could potentially offer a unique form of diversification. However, 401(k) investors don’t need to be taking on excessive risk, as the power of compounding through long-term investing provides a safe, proven method for accumulating wealth.
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Bram Berkowitz has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.
