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President Donald Trump has signed an executive order to make it easier to include cryptocurrency in Americans’ 401(k) retirement funds. It’s a potentially risky move that has been criticised by financial experts.
Trump’s Executive Order on Cryptocurrency in 401(k) Funds
Announced on Thursday, Trump’s new executive order instructs the U.S. Department of Labor (DOL) to reexamine its guidance regarding 401(k) plans’ investment in alternative assets such as cryptocurrency, real estate, and private equity. Trump’s order further directs the Securities and Exchange Commission (SEC) to revise regulations and guidance in order to facilitate such alternative asset investment.
Potential Impact on Crypto Market
In short, this means that the U.S. government may soon overhaul regulations in order to help 401(k) funds invest in crypto. Cryptocurrency prices surged in the wake of Trump’s executive order, with investors anticipating it will lead to more widespread adoption of the currency.
Financial Experts’ Concerns
While the White House claims assets such as cryptocurrency “offer competitive returns and diversification benefits,” financial experts have warned against relying on such assets to fund your retirement. Alicia H. Munnell, a senior advisor at Boston College’s Center for Retirement Research, called such 401(k) investment a “terrible idea,” likening it to gambling and noting that it is unlikely to improve returns.
Trump’s Impact on Crypto Market
Trump’s executive order may encourage more people to venture into cryptocurrency, but whether it will be to their benefit remains to be seen.
