U.S. President Donald Trump intends to sign an executive order permitting 401(k) retirement funds to invest in cryptocurrencies and private equity. This could be a crucial step toward legitimizing crypto assets.
Potential of Pension Funds in Cryptocurrency
The potential influx of $9 trillion into the cryptocurrency market represents significant capital. Even if just 1% of these funds is invested in Bitcoin, it would add $90 billion to its market cap. This way, pension funds could alter the dynamics of the crypto market from volatile to more stable.
Impact on Global Financial Markets
Trump's plans are seen as an opportunity for legitimizing cryptocurrencies in the public eye. Success in integrating these assets into pension funds could prompt other countries to take similar actions, maintaining this decision as a model for global capital investments.
Risks and Possible Consequences
Despite positive prospects, risks exist. Since the structure of pension funds is conservative, the emergence of new norms may provoke public dissatisfaction in case of losses. Market fluctuations associated with the hype around new investment opportunities could also lead to bubbles.
Trump's initiative to include retirement funds in the cryptocurrency space suggests significant changes in the U.S. financial market and globally. This may indicate a shift of crypto assets into the status of legitimate and safe investment instruments.
