401K pensions can buy Bitcoin! SEC chairman stated that trillions of dollars in funds will be lifted

SEC Chair Atkins confirmed the inclusion of cryptocurrencies in 401K retirement plans, emphasizing the need for professional management rather than self-selected assets. In May 2025, the Department of Labor overturned the old guidance, and in August, Trump signed an order to clear the obstacles. 401K has total assets of more than $7 trillion, and a 1% allocation will bring $700 billion in inflows.

SEC Chairman stated that the retirement system is crypto-ready

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U.S. Securities and Exchange Commission (SEC) Chairman Paul Atkins recently confirmed that now is the right time to incorporate cryptocurrencies into 401K retirement plans. In a joint interview with U.S. Commodity Futures Trading Commission (CFTC) Chairman Mike Seligh, Atkins explored the potential of regulated cryptocurrency products in the U.S. retirement system. His remarks reflect that digital assets are gradually being incorporated into mainstream retirement frameworks under strict regulations to protect investor rights.

Atkins believes that the U.S. retirement system is ready for cryptocurrencies because many retirees are already indirectly exposed to digital assets. These assets are often found in professionally managed pension funds, which contain alternative investments such as cryptocurrencies. He emphasized that cryptocurrencies should not be viewed as speculative tools in this context, but rather as a means of diversifying investments in regulated 401K schemes.

The SEC chairman believes that retirees should invest in cryptocurrencies with professionally managed options rather than choosing individual assets on their own. This controlled approach not only safeguards long-term financial security but also fosters innovation in retirement portfolios. Atkins said in an interview: “We want to open the market in a way that protects the interests of retirees.”

This statement marks a significant shift in the SEC’s regulatory stance. Former chairman Gary Gensler has taken an extremely cautious approach to cryptocurrencies, repeatedly warning about the risks of crypto assets and filing lawsuits against several crypto businesses. Atkins’ appointment and this public statement show that the SEC is shifting to a more open crypto regulatory policy under the Trump administration.

The Department of Labor and Trump’s executive order clear policy obstacles

In May 2025, the U.S. Department of Labor reversed previous guidance, clearing the barriers for cryptocurrencies to enter retirement portfolios. This policy reversal is symbolic, as the Department of Labor has previously had reservations about investing in cryptocurrencies in 401K plans, fearing that its volatility could compromise the long-term financial security of retirees. The introduction of the new policy indicates a fundamental shift in the government’s attitude towards crypto assets.

Subsequently, President Trump signed an executive order in August 2025 allowing the allocation of cryptocurrencies in 401K retirement plans. These initiatives mark a noticeable shift in government policy, opening the door for digital assets like Bitcoin to become part of retirement savings. Trump himself promised during the election campaign that he would make the United States the “cryptocurrency capital”, and this executive order is a concrete action to fulfill the promise.

Timeline of policy changes

May 2025: The Department of Labor reversed previous guidance and lifted policy restrictions on 401K investment in cryptocurrencies

August 2025: Trump signs executive order explicitly allowing 401K configuration cryptocurrencies

January 2026: SEC Chair Atkins publicly expressed his support, but emphasized the need for safeguards

The SEC’s current stance aligns with these policy changes, as lawmakers have urged the commission to establish a regulatory framework for cryptocurrency investments in pension funds. Atkins emphasized that the SEC is committed to expanding access to cryptocurrencies for U.S. workers, but only through professionally managed, regulated investment methods. This approach ensures that retirees benefit from cryptocurrency investments while minimizing the risks of speculative investments.

With over $7 trillion in total U.S. 401K plan assets, it’s one of the largest pools of retirement assets in the world. If only 1% of them are allocated to cryptocurrencies, it will bring $700 billion in capital inflows. If the allocation ratio reaches 5%, the capital scale will reach $350 billion. This scale of institutional capital inflows will revolutionize the supply and demand structure of the cryptocurrency market, providing long-term and stable demand support for mainstream assets such as Bitcoin.

The SEC has joined forces with the CFTC to establish a regulatory framework

The U.S. Securities and Exchange Commission (SEC) is working closely with the Commodity Futures Trading Commission (CFTC) to build a framework that balances innovation with investor protection. Atkins has confirmed the SEC’s support for the Market Transparency Act, which aims to provide clearer regulation for cryptocurrencies. Despite some delays in the bill, the SEC continues to provide critical technical support to move the bill forward.

Atkins reiterated that the primary goal of the U.S. Securities and Exchange Commission (SEC) is to protect investor interests while encouraging the development of new financial products. The SEC’s collaboration with the U.S. Commodity Futures Trading Commission (CFTC) is crucial to ensure that any cryptocurrency product included in the pension fund meets the necessary standards. This collaboration reflects the growing bipartisan support for expanding the proportion of cryptocurrency investments in retirement plans with safeguards in place.

The coordination priorities of the two agencies include: clarifying which crypto assets are securities (under the jurisdiction of the SEC) and which are under the jurisdiction of the commodity (under the jurisdiction of the CFTC); establishing disclosure requirements and risk warning standards for 401K plans to invest in cryptocurrencies; Formulate eligibility reviews and insurance requirements for escrow institutions; and establish investment ratio limits to prevent retirees from over-allocating high-risk assets.

Atkins particularly emphasizes the importance of professional management. He opposes allowing retirees to buy and sell individual cryptocurrencies directly in their 401K accounts, as this autonomous choice can lead to irrational investment decisions. Instead, he supports indirect allocation of cryptocurrencies through professionally managed products such as target-date funds and balanced funds. These funds are managed by professional fund managers and dynamically adjust cryptocurrency allocations based on retirees’ age and risk tolerance.

Regulatory balance between professional management and self-selection

Atkins’ statement reveals the SEC’s core philosophy on 401K crypto investments: open but controlled. He opposes a complete ban because it would deprive retirees of access to emerging asset classes. But he also opposes a complete liberalization because most retirees lack the professional ability to assess the risks of crypto assets.

This regulatory philosophy in practice means: retirement plan providers can add cryptocurrency funds to their investment menus, but must set a default allocation ratio cap (e.g., no more than 5% of total assets); Fund managers must disclose the volatility risk and potential losses of cryptocurrency exposure; The escrow must meet strict security standards and insurance requirements; and regularly reporting the performance and risk profile of crypto assets to retirees.

This controlled and open model draws on the experience of other alternative assets entering the 401K. Real estate investment trusts (REITs), private equity, and hedge funds have all undergone a similar regulatory evolution: initially banning → allowing indirect allocation through professionally managed products→ gradually easing proportional restrictions→ eventually becoming a regular part of retirement portfolios. Cryptocurrencies are following the same path and are currently in their second phase.

For the cryptocurrency market, this institutionalized inflow of funds is more meaningful than retail speculation. 401K funds pursue long-term stable returns, not short-term profiteering. This capital feature will reduce market volatility and improve the price stability of crypto assets. More importantly, pension fund allocation decisions are based on rigorous due diligence and risk assessment, and this professional judgment provides value anchor for the entire market.