U.S. President Donald Trump has signed an executive order allowing retirement funds to invest in cryptocurrencies and other alternative assets. This development could lead to a significant influx of capital into the crypto market.
What is a 401(k) Retirement Plan?
A 401(k) retirement plan is a type of retirement savings plan offered by employers in the U.S., allowing employees to contribute a portion of their paycheck. Previously, funds could mainly be invested in stocks and bonds.
Impact of Trump's Order on the Crypto Market
The new order enables the inclusion of cryptocurrencies in retirement accounts, which could lead to substantial long-term investments in this market. According to the Investment Company Institute, nearly $9 trillion is currently invested in 401(k) plans. This could improve liquidity and stability in the crypto market.
Crypto Market Reaction After the New Order
Following the announcement, the crypto market cap rose significantly by 2.7%. Bitcoin saw a 1.7% increase, nearing $117,600. Ethereum also rose by 4.7%, while XRP jumped by 11.41%.
Trump's order may reshape the perception of cryptocurrencies as a legitimate asset class and potentially attract new investments into the sector.
