The U.S. pension market may undergo significant changes, with alternative asset investments being followed.

Recently, there have been reports that the U.S. President is considering signing an executive order to allow retirement plans like 401(k) to invest in alternative assets such as cryptocurrencies, gold, and private equity. This news has garnered widespread attention as it could clear the way for digital assets to enter the $8.7 trillion retirement market in the U.S.

This move did not come out of nowhere. In May of this year, the U.S. Department of Labor rescinded its previous guidance on "extreme caution regarding crypto assets." Earlier in 2022, there were lawmakers who proposed the "Retirement Savings Modernization Act" in an attempt to incorporate digital assets into the existing legal framework. Although it was not passed, it laid the groundwork for today's policy shift.

This potential executive order aims to break the long-standing focus of 401(k) plans on traditional stocks and bonds, granting greater flexibility in asset allocation. It will instruct regulators to study and remove barriers preventing alternative assets from entering 401(k) professionally managed funds.

The White House has expressed caution regarding this, emphasizing that any decision should only be considered official policy after a formal announcement. However, this statement does not conceal the strong signal from the government to promote the mainstreaming of cryptocurrencies.

In fact, this move is a continuation of a series of pro-crypto policies. From pledging to ease regulations, to relevant companies heavily investing in digital currencies, and then launching their own stablecoins and other digital tokens, the government has become an important player in the digital asset space.

To understand the potential impact of this policy, it is necessary to understand the structure and scale of the U.S. retirement market. As one of the largest retirement systems in the world, the total size of the U.S. retirement market reaches $9 trillion. Among them, the 401(k) plan holds $8.7 trillion, which is the core of long-term savings for the vast majority of working families.

Traditionally, these large retirement funds mainly flow into publicly traded securities. As of the end of March 2025, $5.3 trillion (61%) of the 401(k) plans is managed by mutual funds, with equity funds being the largest at $3.2 trillion. It is precisely this asset allocation situation dominated by stock and bond mutual funds that provides ample space for the "ice-breaking" of alternative investments being promoted this time.

In addition to cryptocurrencies, this policy is also a significant opportunity for the world's largest private equity groups. These giants have largely pinned their hopes for future growth on managing funds from ordinary retirement savers. They predict that once they successfully enter the 401(k) retirement plan market, it could attract hundreds of billions of dollars in new industry assets.

To this end, several private equity firms have established partnerships with large asset management companies to provide investment services for 401(k) plan sponsors. At the same time, some state governments have started pilot programs allowing certain retirement funds to invest in cryptocurrencies.

Nevertheless, this transformation still faces challenges. Investing retirement savings into less liquid private assets carries risks, including high fees, a higher overall leverage ratio, and lower transparency in the valuation of fund assets, all of which require careful consideration by regulators and investors.

In terms of legislation, the U.S. House of Representatives recently passed three important cryptocurrency-related bills, providing a clearer legal framework for the industry's development. However, the market still faces many challenges.

This pension investment innovation may redefine the meaning of "retirement savings". Whether it can allow ordinary people to share in the technological dividends of the digital age, or if it will expose pensions to new types of risks, may depend on how regulators find a balance between innovation and protection.