Altcoins have rebounded after the signing of an executive order allowing cryptocurrencies to be included in US pension funds. But is the move a good one, and how has it impacted the price of cryptocurrencies?
An executive order has been signed by the US President Donald Trump. This now makes it easier to include cryptocurrencies in 401(k) funds, which is the retirement pot for citizens of the United States. As of Thursday, the US Department of Labour must begin to reassess its guidance on investment in alternative assets such as cryptocurrency, private equity, and real estate. It also directs the Securities and Exchange Commission to amend its policies to allow the $8.9 trillion pension pot to be opened up to digital assets.
The 401 (k) and Cryptocurrency
This opens the possibility for crypto to be used in retirement funds. The immediate result of this, after the news broke, was that a renewed rally in crypto began, with bitcoin heading over the $117,000 mark. It also gave a fresh push to what many were predicting as the start of altcoin season. This is when alternatives to Bitcoin do better in price gains as people look for alternative assets that provide more of a return. While it boosts well-known coins like Ether and XRP, it also bodes well for the memecoins sector. These are often based on popular viral trends and, like artwork, have value placed on them dependent on desirability. The most famous of these is DOGE, but new ones arrive regularly.
Of the move, Trump said, “A combination of regulatory overreach and encouragement of lawsuits filed by opportunistic trial lawyers has stifled investment innovation. My administration will relieve the regulatory burdens and litigation risk that impede American workers’ retirement accounts from achieving the competitive returns and asset diversification necessary to secure a dignified, comfortable retirement.”
Many have cited this as a further move for ongoing institutional adoption, with others believing it adds legitimacy to the asset class. Combined with the improving odds of an interest rate cut next month, it is being predicted as a bullish outlook for bitcoin and other cryptocurrencies.
When signed, the President also issued a separate executive order. This was centred on the concept of 'debanking' for conservatives, who have been arguing that they are often denied banking services on political grounds. It is believed that many Silicon Valley investors have pursued this over the past year as they have moved to ease the scrutiny of digital assets.
Worries About 401 (k) Diversification
Prior to this, there was no outright ban on cryptocurrency being included in 401(K) plans. However, the DOL had cautioned against such a move, saying it should be done with “extreme care”. It also discussed many of the pitfalls, including its volatility and issues regarding valuation. This guidance was issued during Trump's previous Presidency and set out how people could invest in private equity funds given certain limitations. However, few did due to litigation risks.
There are others who have criticised the move, saying that the degree of risk is too high. This is mainly down to the fact that the currency is highly speculative. While they have said alternative assets are not unreasonable, if the industries they come from are unregulated, then it is.
Many financial companies have not waited and have begun to dive headlong into this. BlackRock is hoping to launch its own retirement fund by next year. It will include private credit assets and private equity. However, even BlackRock is airing on the side of caution, believing it proves a huge litigation risk. Their CEO, Larry Fink, has stated that there are issues going forward with the defined contribution business.
Altcoin Performance
The results of this announcement were a huge push in the altcoin market. Ether performed extremely well, scraping tantalisingly close to the $4000 resistance zone. Inflows to spot ETH products also remained strong, showing renewed confidence.
The dominance of ETH has also moved up to about the 12% mark for the first time in 2025. This is a measure of how dominant Bitcoin is in terms of market cap. When it lowers, this shows altcoins are gaining traction. Ripple also went up by just 12% with Solana rising 3.3%.
Cautionary tales abound with crypto. Many involve volatility, manipulation, scams, and hacks. Yet with more major institutional investment, these seem to be rescinding, while the possible gains remain. This makes crypto more desirable than ever.
This order is one of many from the Trump administration that have aimed to make the US the Crypto Capital of the World. It follows on from the GENIUS Act, which was designed to place stronger regulations on the use of Stablecoins. These are digital assets pegged to fiat currencies, such as the US dollar. It is certain that further changes will follow to bring in more institutional adoption.
