Crypto 401k: A New Era for Retirement Savings?

In a groundbreaking move, the U.S. Department of Labor (DOL) has rescinded its 2022 guidance that cautioned against including cryptocurrency in 401(k) plans. This policy shift could mark a significant turning point for retirement savings, potentially opening the door for more Americans to invest their retirement funds in digital assets through crypto 401k offerings.

What Is a Crypto 401k?

A 401(k) is a tax-advantaged retirement savings plan offered by many employers in the United States, typically featuring investments like stocks, bonds, and mutual funds. A crypto 401k, however, refers to retirement plans that allow participants to invest in cryptocurrencies, such as Bitcoin or Ethereum. While this concept has gained traction among some investors due to the high growth potential of digital assets, it has also faced scrutiny due to the volatility and risks associated with the crypto market.

The Policy Shift From Caution to Neutrality

The 2022 guidance from the DOL advised fiduciaries—those responsible for managing 401(k) plans—to exercise “extreme care” when considering cryptocurrency as an investment option. It highlighted risks such as fraud, theft, and significant price swings, effectively discouraging the inclusion of crypto in retirement plans, as noted in the DOL’s 2022 release.

On May 28, 2025, the DOL, under Secretary Lori Chavez-DeRemer, rescinded this guidance, as announced in a DOL press release. The new stance, outlined in Compliance Assistance Release No. 2025-01, is neutral, neither endorsing nor disapproving of including cryptocurrency in 401(k) plans. Instead, it leaves the decision to fiduciaries, who must evaluate crypto options based on their own judgment and fiduciary duties under the Employee Retirement Income Security Act (ERISA).

This change represents a departure from the previous administration’s approach, which was seen as overly restrictive by some. Secretary Chavez-DeRemer stated, “The Biden administration’s department of labor made a choice to put their thumb on the scale. We’re rolling back this overreach and making it clear that investment decisions should be made by fiduciaries, not D.C. bureaucrats.”

A Pro-Crypto Administration

The rescission aligns with the Trump administration’s broader embrace of the cryptocurrency industry. President Trump’s family has pursued crypto ventures, and the administration has taken steps to support digital assets, including establishing a “bitcoin Treasury” that raised $2.5 billion. Additionally, Vice President JD Vance is scheduled to speak at a major bitcoin conference in Las Vegas, further signaling the administration’s pro-crypto stance, per Politico.

This policy shift also comes amid legislative efforts to support crypto in retirement plans. The Financial Freedom Act, introduced by Sen. Tommy Tuberville (R-Ala.) in 2022 and reintroduced in April 2025 with Rep. Byron Donalds (R-Fla.), aims to prohibit the DOL from limiting self-directed 401(k) investments in cryptocurrency while protecting fiduciaries from liability, according to NAPA-Net.

Financial Implications: Opportunities and Risks

The rescission of the 2022 guidance could lead to more 401(k) plans offering cryptocurrency as an investment option. For retirement savers, this presents both opportunities and risks, as outlined below:

Aspect	Details
Opportunities	– Diversification: Cryptocurrency has shown significant growth potential, with some assets delivering substantial returns. – Innovation: Including crypto in 401(k) plans aligns retirement savings with the evolving digital economy.
Risks	– Volatility: The crypto market is highly volatile, with prices subject to rapid fluctuations. – Security Concerns: Digital assets are vulnerable to hacking, fraud, and theft, as seen in the 2022 “Crypto Winter” with collapses like FTX and Terra Luna, per CNBC. – Fiduciary Liability: Fiduciaries remain accountable under ERISA, risking lawsuits if crypto investments lead to losses.

Financial experts have mixed reactions. Critics like Knut Rostad, executive director of the Institute for the Fiduciary Standard, argue that “cryptocurrency may not belong in 401(k)s due to the high risks involved,” as cited in CNBC. Similarly, Philip Chao of Experiential Wealth warns that the rescission could expose retirement savers to unnecessary dangers. Stephen Hall from Better Markets notes that the 2022 guidance likely saved millions from losses during the 2022 crypto market crash, referencing collapses like Terra Luna and FTX, per CNBC.

Conversely, crypto advocates welcome the change, arguing it empowers fiduciaries to make independent investment decisions. The Investment Company Institute also issued a statement supporting the DOL’s neutral stance.

Looking Ahead: A Balancing Act

The DOL’s decision to rescind the 2022 guidance marks a significant development in the intersection of traditional retirement savings and digital assets. While this opens up new possibilities for investors, it also underscores the importance of careful consideration and due diligence by both fiduciaries and plan participants. As the crypto landscape continues to evolve, the inclusion of crypto in 401(k) plans will likely remain a topic of debate and scrutiny.

For now, the responsibility lies with fiduciaries to weigh the potential benefits of crypto 401k options against their well-documented risks. As one expert noted, “This is a mistake,” while others see it as a step toward financial innovation. Only time will tell how this policy shift will impact the future of retirement investing.