Trump’s executive order opens the door to retirement plan crypto allocations, unlocking billions in potential inflows
The inclusion of cryptocurrency in U.S. 401(k) retirement plans could become a game-changer for Bitcoin adoption, potentially driving the asset’s price to $200,000 by the end of 2025, according to Bitwise Asset Management. The forecast follows President Donald Trump’s Aug. 7 executive order allowing Americans to allocate retirement savings into digital assets.
Bitwise’s head of European research, André Dragosch, said even a modest 1% allocation from U.S. retirement portfolios — a $12.2 trillion market — could mean $122 billion in new inflows. He argued that the impact may surpass the approval of U.S. spot Bitcoin ETFs in January 2024.
“This is potentially bigger than the Bitcoin ETF approval itself,” Dragosch said. “The official prediction remains $200,000 by the end of the year.”
Fed Policy and Retirement Allocations as Dual Drivers
Bitwise surveys suggest most portfolio managers would recommend a 2.5% to 3% Bitcoin allocation, well above the conservative 1% baseline. The first inflows from 401(k) managers are expected this fall, coinciding with the Federal Reserve’s anticipated rate cuts, which could further accelerate momentum.
“If you see further Fed rate cuts, there’s definitely a case for $200,000 by the end of the year,” Dragosch added.
Markets currently price in an 83% chance the Fed holds rates steady at the September 17 FOMC meeting, according to CME Group’s FedWatch tool.
The Role of Major Providers
Major U.S. retirement plan providers, including BlackRock, Fidelity, and Vanguard, are expected to play a pivotal role. While Vanguard remains cautious, BlackRock and Fidelity have strong incentives to include Bitcoin ETFs.
BlackRock’s iShares Bitcoin Trust, with over $84 billion in assets, commands 57.5% of U.S. spot Bitcoin ETF market share, while Fidelity’s fund holds $22.4 billion, or 15.3%, according to Dune data.
U.S. Securities and Exchange Commission Chair Paul Atkins confirmed that the agency is working with the administration to enable retirement plan access to alternative assets, including crypto. However, he stressed the importance of “proper guardrails” to protect investors.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.