U.S. Congress pressures SEC, 401(k) retirement plans may usher in the Bitcoin era

The U.S. House Financial Services Committee officially sent a letter to Securities and Exchange Commission (SEC) Chairman Paul Atkinson on December 11, requesting rule changes to allow cryptocurrencies like Bitcoin to be included in 401(k) and other retirement plans. This move is a direct follow-up to President Trump’s August 2025 executive order titled “Democratizing Access to Alternative Assets for 401(k) Investors.” The core goal is to redefine the “qualified investor” rules, opening the door for teachers, nurses, and other ordinary working-class individuals to invest in crypto assets. This is seen as a key institutional breakthrough for cryptocurrencies to enter the mainstream financial system.

Congress Teams Up with the White House to Promote Retirement “Crypto-ification”

The U.S. Congress is taking concrete steps to integrate crypto assets into the massive traditional retirement savings system. In their letter, the House Financial Services Committee explicitly calls on SEC Chairman Paul Atkinson to establish new rules to clear the way for Bitcoin and other digital assets to enter fixed contribution retirement plans like 401(k). This action is not isolated but a direct response to President Trump’s August 2025 executive order.

The executive order, titled “Democratizing Access to Alternative Assets for 401(k) Investors,” centers on policy: every American saving for retirement should have the right to access investment funds containing alternative assets when their retirement plan trustees determine such investments can provide appropriate opportunities to enhance risk-adjusted net returns. The Congress appreciates this stance and urges the SEC to act swiftly to implement it.

Key Points of Trump’s Executive Order and Congressional Letter

• Executive Order Signing: August 7, 2025, focusing on “Democratizing Access to Alternative Assets.”
• Congressional Formal Letter: December 11, 2025, requesting SEC to modify rules accordingly.
• Target Agencies: SEC and Department of Labor.
• Core Asset Categories: Cryptocurrencies explicitly listed alongside private equity and real estate.
• Ultimate Goal: Enable ordinary retirement savers to invest in crypto assets through compliant channels.

This marks a policy synergy between the highest legislative and executive branches on the theme of “financial innovation,” aiming to systematically lower barriers to investing in alternative assets. The executive order explicitly instructs the Secretary of Labor and SEC to negotiate parallel regulatory reforms and requires the SEC to facilitate investments in alternative assets through amendments to its regulations and guidelines for retirement plan participants.

Reshaping “Qualified Investors” to Open the Door for Ordinary People to Invest in Alternatives

One of the central campaigns driven by Congress is to amend the longstanding “qualified investor” rules. Currently, strict net worth or income thresholds block most ordinary Americans from participating in “alternative assets” such as venture capital, private equity, and certain hedge funds—investment opportunities with high potential returns that have long been considered exclusive to the wealthy.

Congress is advancing new legislation aimed at breaking this barrier. Proposed rules may allow individuals holding professional licenses (such as financial analysts, engineers), possessing specific work experience, or passing a specialized financial knowledge and risk-awareness exam to qualify as “qualified investors.” This means teachers, nurses, technicians, and other middle-class professionals could legally invest in asset classes previously reserved for ultra-high-net-worth individuals, including crypto assets.

This is not merely a technical adjustment but a profound “investment democratization” movement. It will fundamentally change how Americans build their retirement portfolios—from reliance solely on stocks and bonds in public markets to a broader spectrum including crypto assets. For the crypto industry, this signals a potential long-term, stable influx of trillions of dollars in incremental capital over the coming years.

The Regulatory Reclassification of Crypto Assets: From “Securities” to “Legitimate Investment Instruments”

The progress of congressional action is closely tied to a shift in SEC attitudes under Paul Atkinson’s leadership. Unlike his predecessor’s hardline stance, Atkinson has adopted a more pragmatic approach aimed at creating clear regulatory frameworks for digital assets. His “Crypto Project” (Project Crypto) seeks to clarify how different digital assets should be classified and regulated.

Recently, Atkinson has signaled in multiple public speeches that he believes most cryptocurrencies traded in the market today do not meet the definition of “securities.” This is crucial because once classified as securities, crypto assets face complex and strict registration, disclosure, and trading regulations, making it nearly impossible for them to be included in standardized retirement plan investment menus.

This reclassification—from “security” to “non-security commodities or investment assets”—provides a key regulatory basis for retirement plan trustees to consider adding mainstream crypto assets like Bitcoin and Ethereum as investment options. It alleviates legal compliance concerns for plan managers and is a prerequisite for cryptocurrencies to be accepted as “legitimate investment instruments” rather than “speculative tools” by traditional financial institutions. The SEC’s softened stance can be seen as a vital bridge connecting congressional policy intentions with market implementation.

Opposition Voices: Volatility Risks Remain the Biggest Concern

While this policy trend is welcomed by the crypto community and advocates of financial innovation, voices of criticism and concern remain strong and cannot be ignored. The primary opposition centers on: the high volatility of cryptocurrencies and whether they are suitable as long-term, stable core investments for retirement savings, which are crucial for public pension security.

Critics argue that the primary principles of pension investments are preservation of capital and steady growth—not chasing high risks for high returns. The historic sharp price corrections of Bitcoin and other cryptos could lead to significant losses for participants nearing retirement, conflicting with the fundamental purpose of pension plans. Furthermore, crypto markets are still under regulatory development, with concerns around custody security and market manipulation, which pension trustees must carefully evaluate.

These concerns reflect a fundamental tension between traditional financial prudence and the characteristics of emerging asset classes. Even if rules permit, many 401(k) plan managers and trustees may not immediately incorporate crypto options—they need to rigorously assess asset safety, liquidity, valuation methods, and investor education. Therefore, opening the policy door is just the first step; market acceptance will be gradual and highly selective.

Current State of the U.S. Retirement Market and Crypto ETFs

To appreciate the significance, one must understand the massive scale of the U.S. retirement market. The 401(k) plans are the primary employer-sponsored retirement savings tools, with total assets exceeding $7 trillion by the end of 2024. Even a small proportion of these funds allocated to crypto assets would generate enormous incremental capital. In comparison, the total assets under management of existing spot Bitcoin ETFs in the U.S. are about $60 billion, far less in scale.

Moreover, the approval and successful operation of spot Bitcoin and Ethereum ETFs from 2024 to 2025 have already provided traditional financial institutions with compliant, convenient channels for crypto investment. Managed by giants like BlackRock and Fidelity, and traded on mainstream brokerage platforms, these ETFs have laid the groundwork for crypto assets to be indirectly incorporated into retirement accounts. Retirement plans could simply allocate to these SEC-registered ETFs to gain exposure to cryptocurrencies, likely the initial feasible path.

Regulatory Outlook: What Might Be the Next Steps?

Going forward, markets will closely monitor the SEC’s formal response to the congressional letter and the timeline for rulemaking. Possible paths include: the SEC issuing an interpretive guidance or “no-action letter” clarifying under what conditions retirement plan trustees can select crypto-related investments (such as via compliant ETFs) without breaching fiduciary duty. Subsequently, formal rule amendments could be introduced to revise the “qualified investor” definition and related disclosure requirements.

The role of the Employee Benefits Security Administration (EBSA) under the Department of Labor is also crucial, as it directly oversees fiduciary conduct of retirement plans. Coordination between the SEC and DOL will be vital. The entire process may take months or longer, involving public comment periods, lobbying efforts, and industry advocacy.

Conclusion: The Beginning of Institutional Acceptance

The push by Congress to incorporate crypto assets into 401(k) retirement plans is not merely a policy proposal but a milestone in the evolution of cryptocurrencies from a fringe, controversial speculative category to a “legitimate alternative asset” considered by the national retirement savings system. It reflects the combined influence of political trends, regulatory philosophy, and market maturity. Even with potential obstacles and cautious approaches ahead, once the gates loosen, the barriers between traditional finance and the crypto world—funds and perceptions—will accelerate their dissolution. This signals not only a potential massive influx of capital but also a societal shift where cryptocurrencies begin competing for a role in wealth storage and intergenerational transfer. The real test lies in whether the industry can support this heavy expectation with more robust, transparent, and accessible forms.