U.S. Labor Department Drops Crypto Warning, Opening Door for Bitcoin in 401(k)s
The U.S. Department of Labor has officially withdrawn its previous warning against including cryptocurrencies in retirement plans, a move that could expand access to assets like Bitcoin and Ethereum within 401(k) portfolios.
The reversal—enacted under the Trump administration—marks a significant shift from the 2022 guidance issued by the Biden-era Labor Department, which urged extreme caution due to crypto’s volatility, risk of fraud, and unclear regulatory status. While not a ban, that guidance had discouraged plan sponsors from offering crypto options without strong justification.
Now, the Labor Department has adopted a neutral position. Plan fiduciaries are free to evaluate digital assets as potential investments, so long as they meet the legal standard of prudence under the Employee Retirement Income Security Act (ERISA).
The change reflects a broader embrace of cryptocurrency by the Trump administration, which has supported pro-crypto policies, accepted digital asset donations, and even floated the idea of a national crypto reserve.
Still, many retirement plan sponsors remain cautious. Financial advisors recommend keeping any crypto allocation small—typically no more than 1–3%—given ongoing concerns about volatility, valuation, and secure storage.
While this policy shift opens the door for innovation, it doesn’t guarantee widespread adoption. It puts the decision back in the hands of plan administrators, making the future of crypto in retirement accounts both possible—and uncertain.
Featured image from: coinedition.com