Exploring Alternative Investment Options for Retirement Plans: A Potential Shift in Market Regulations

Trump Eyes Crypto for U.S. Retirement Plans – VC Calls It ‘Huge Unlock’

U.S. President Donald Trump is reportedly considering an executive order to open up retirement markets, specifically 401(k) plans, to alternative investments, including cryptocurrency and gold. This move could have a significant impact on the crypto market, with one venture capital (VC) partner calling it a “huge unlock” for the industry.

According to a Financial Times report, regulators would need to overcome current hurdles preventing the inclusion of these alternative investments in managed retirement funds involving 401(k). Currently, retirement plans primarily focus on index funds and stocks as an investment option. If Trump’s plan comes into effect, a portion of employees’ retirement can be directed towards crypto investments.

This development aligns with Trump’s broader pro-crypto shift and goals. The Trump-era SEC has rolled back enforcement actions against major crypto platforms, and the Fed has relaxed previous strict access to traditional banking sector. Even the U.S. housing market agency has endorsed Bitcoin and other crypto assets to be considered during mortgage applications. A legislative proposal has been made to make it permanent.

Omar Kanji, investment partner at crypto VC Dragonfly, views this development as a massive opportunity for the industry. “Biggest unlock for crypto got buried with today’s announcements,” he stated. “US retirement assets sit at $43 trillion, with $9 trillion in 401ks. With Trump opening the floodgates, if crypto sees just a 1% allocation from 401ks, that’s ~$90 billion in fresh inflows.”

While this development could be seen as positive by many in the industry, others may view the high volatility of cryptocurrency as a risk factor for retirement plans.

It remains to be seen whether Trump will move forward with this plan.

Source: ambcrypto.com