The U.S. Department of Labor has proposed a new rule establishing a safe harbor for 401(k) plan fiduciaries who offer alternative investments, including cryptocurrency funds. The rule, implementing a 2025 directive from President Donald Trump, would protect fiduciaries from legal liability if they follow a detailed review process. This move rescinds previous restrictive guidance and could open a portion of America’s $10.1 trillion 401(k) market to digital assets.
A proposed rule from the U.S. Department of Labor would create a legal safe harbor for fiduciaries of 401(k) plans who consider adding cryptocurrency and other alternative investments. The rule, scheduled for formal publication, implements an August 2025 directive from President Donald Trump to expand access to such assets.
Fiduciaries who conduct reviews on performance, fees, liquidity, valuation, benchmarking, and complexity would receive protection if they follow that documented process. This follows the department’s May 2025 decision to rescind earlier guidance that urged “extreme care” before adding crypto to 401(k) menus.
Americans held roughly $10.1 trillion in 401(k) plans as part of a $14.2 trillion defined contribution market. Data from the Investment Company Institute shows that only 4% of defined contribution plans offered alternative investments last year, with just 0.1% of assets allocated to them.
“Retirement funds are the holy grail for bitcoin enthusiasts looking for new investors: oceans of cash, tax-advantaged,” said Andrew M. Bailey, Senior Fellow at the Bitcoin Policy Institute. He noted that while long investment horizons suit new technologies, the plans’ risk-averse nature and tight regulations pull in the opposite direction.
The proposal places digital assets “on the same playing field” as other alternatives, according to lawyer and lecturer Joshua Chu. “If a fiduciary can document a robust process on fees, liquidity, valuation and complexity, they now have a clear safe harbor roadmap instead of a regulatory minefield,” he said.
However, fiduciaries would still need to build daily pricing, liquidity, and risk controls for crypto within 401(k) structures. Bailey also questioned whether direct 401(k) exposure would complement or cannibalize demand for existing equity-based bitcoin investment vehicles.
