U.S. President Donald Trump has signed a new executive order that expands investment opportunities in cryptocurrency and private equity in retirement plans. This decision could channel billions of dollars into crypto assets.
Executive Order on Crypto Assets
The signed order highlights the benefits of investing in alternative assets, such as real estate and cryptocurrencies, in terms of competitive returns and risk distribution. Previously, the U.S. Department of Labor had advised caution against using cryptocurrencies in retirement plans, but this warning was lifted in May. It is expected that the Department of Labor will release new guidelines that treat cryptocurrencies like other assets.
Cryptocurrency Market and Retirement Plans
These regulatory changes may prompt asset managers to revisit their positions on cryptocurrencies. Consequently, significant funds may flow into mutual funds that include Bitcoin and similar assets, or directly into these assets.
CITE_W_A: "This decision is not about the government saying 'crypto should be in retirement plans.' It’s about empowering people to make their own choices." — Matt Hougan, Chief Investment Officer at Bitwise.
The Future of Cryptocurrencies in Retirement Funds
Another executive order signed by Trump aims to prevent financial institutions from limiting or denying services based on political or religious views. According to a White House release, this move guarantees fair access to banking services for all Americans.
The newly signed orders might lead to competition among cryptocurrency-based retirement funds, likely boosting the number of mutual funds. Including cryptocurrency in retirement plans will create 5-10 year holding periods, which could be a significant development for the market.
Trump's signed orders could have a significant impact on the integration of cryptocurrencies into retirement funds, as well as on the removal of restrictions for cryptocurrency companies in the banking system.
