Crypto for Advisors: Crypto's Place in 401(k) Plans

Crypto 401(k) plans are on the verge of a historic transformation as federal regulators and the White House align to bring digital assets into the American retirement system. For more than a decade, the $10 trillion 401(k) marketplace remained effectively walled off from cryptocurrency due to ambiguous guidance and the threat of litigation. Now, a series of decisive policy actions throughout 2025 and into 2026 are reshaping the landscape, positioning crypto not as a speculative fringe bet but as a permanent component of institutional retirement portfolios, according to David Lawant, head of research at Anchorage Digital.

DOL Reversal Clears the Path for Crypto in Retirement Plans

The Department of Labor is the federal agency charged with enforcing ERISA, the 1974 law establishing minimum standards for most private-sector retirement and health plans. In March 2022, the DOL issued Compliance Assistance Release No. 2022-01, which effectively created a de facto prohibition on crypto assets in retirement portfolios by requiring fiduciaries to exercise "extreme care" and warning of targeted investigations for those incorporating digital assets.

That restrictive posture was formally abandoned on May 28, 2025, when the DOL published Compliance Assistance Release No. 2025-01. The agency acknowledged that its prior "extreme care" standard had "deviated from the requirements of ERISA" and its "historically neutral, principled-based approach," according to David Lawant. The rescission reinstated the legal framework set by the Supreme Court, which requires fiduciaries to make prudent investment decisions based on contextual evaluations of risk and return -- not blanket asset-class exclusions.

The more forceful catalyst arrived on August 7, 2025, when President Donald Trump signed Executive Order 14330, titled "Democratizing Access to Alternative Assets for 401(k) Investors." This directive marked a fundamental pivot in federal posture, moving from caution to an affirmative mandate for facilitating access to "alternative assets." The order explicitly defined crypto alongside established categories such as private equity and real estate, according to Lawant.

What Does the Upcoming DOL Guidance Mean for Crypto Adoption?

Broad crypto adoption in 401(k) plans hinges on the design of a forthcoming fiduciary safe harbor, a regulatory checklist intended to shield fiduciaries from liability for investment losses provided specific standards are met. This past January, the DOL submitted a proposed rule to clarify its position on alternative assets and the appropriate fiduciary process. The document remains with the Office of Management and Budget, but with the 180-day White House deadline already expired, industry observers expect it could be released for public comment soon, according to Lawant.

Critical pillars of the anticipated safe harbor are expected to include qualified custody requirements, liquidity constraints, and portfolio allocation caps. Even once the major regulatory hurdle is cleared, however, widespread adoption will likely unfold gradually over several years rather than igniting overnight. The transition from high-friction Self-Directed Brokerage Accounts toward seamless inclusion in core investment menus and Target Date Funds depends on fiduciary buy-in, platform compatibility, and the involvement of key gatekeepers.

Investment consultants such as Mercer, Aon, and Willis Towers Watson serve as critical intermediaries in the 401(k) ecosystem, and while they tend to proceed cautiously, allocation to alternatives is emerging as a top-of-mind priority, according to Lawant. At the same time, the industry must bridge the gap between legacy "mutual fund plumbing" and digital asset infrastructure to ensure 401(k) platforms can seamlessly accommodate the new asset class.

Why the 401(k) Market Could Dampen Crypto Volatility

The 401(k) system's unique flow profile could serve as a mechanical volatility dampener for crypto markets over time. Retirement participants are price-inelastic investors whose bi-weekly, non-discretionary payroll contributions generate a stabilizing bid that persists regardless of short-term market sentiment, according to Lawant. This effect is amplified by managed accounts and target-date funds, which institutionalize a "buying the dip" approach by automatically purchasing assets during corrections to restore target allocations.

Unlike the rapid debut of spot exchange-traded funds, the integration of crypto into retirement accounts will likely represent a slow-building, accumulating wave over years. Yet the sheer scale and inherent stability of the 401(k) investor base make 2026 the pivotal year when crypto's role in the American nest egg became an undeniable, permanent fixture, Lawant said.

The sheer size and unique stability of this investor base make 2026 the year crypto's role in the American nest egg became an undeniable, permanent fixture.

— David Lawant, Head of Research, Anchorage Digital

Global Institutions Ramp Up Regulated Crypto Exposure

Institutional appetite for regulated crypto exposure is accelerating worldwide, according to the latest 13F filings analyzed by digital asset research specialist Kevin Tam. Overseas hedge funds from Hong Kong and the United Kingdom are heavily accumulating spot bitcoin ETFs to build their portfolios, with Laurore Ltd. emerging as a notable new entrant holding 100% of its portfolio in BlackRock IBIT fund.

Pension fund exposure is also expanding rapidly. South Korea's National Pension Service increased its MicroStrategy position to $93.6 million, far outpacing the $3.5 million stake held by Canada's Investment Management of Ontario. Most strikingly, Norway's central bank, Norges Bank, opened a new MicroStrategy position valued at $536 million during Q4, signaling that sovereign wealth funds view regulated bitcoin vehicles as strategic portfolio assets.

Not every institution is adding exposure, however. The National Bank of Canada reduced its MicroStrategy stake by 51% in Q4 2025, with shares dropping in tandem with the stock's price decline. The bank's position fell from $659 million to $152 million during the quarter, and it also holds $52.4 million in put options on the stock, suggesting a more cautious or hedged approach, according to Tam.

What This Means Going Forward

The global regulatory trajectory points firmly toward legitimization of digital assets within traditional financial infrastructure. MiCAR was implemented across the European Union in June 2025, the GENIUS Act was signed into law in the United States in July 2025, and Hong Kong, Singapore, and the UAE have all established formal digital asset frameworks. Looking further ahead, the Canadian Securities Administrators are expected to propose amendments enabling broader tokenization of securities and ETFs in Q4 2026, according to Tam.

Driven by regulatory clarity and the sustained adoption of digital asset ETFs, institutional investors increasingly view crypto as a strategic asset for diversification and long-term growth. The convergence of DOL guidance, executive action, and global regulatory alignment suggests that 2026 will be remembered as the year crypto became embedded in retirement planning. For financial advisors, the question is no longer whether crypto belongs in 401(k) portfolios -- but how to implement it responsibly within fiduciary frameworks.