You Can Now Buy Bitcoin in Your 401(k): Here's What You Need to Know
President Trump just made cryptocurrency legal in retirement accounts. Here's how it affects your money.
The rules just changed. On August 7, 2025, President Trump signed an executive order allowing Americans to invest their 401(k) money in cryptocurrency for the first time. This opens up the $9 trillion retirement market to Bitcoin, Ethereum, and other digital assets.
If you have a 401(k), this could change how you build wealth for retirement. But before you get excited, there's a lot you need to understand about costs, risks, and what's actually available right now.
What Actually Changed
The Department of Labor removed restrictions that basically banned crypto from retirement plans. For years, government guidance scared employers away from offering crypto options. That guidance is gone.
Now it's up to your employer and 401(k) provider to decide if they want to offer crypto investments. The government won't stop them, but they're not required to add these options either.
The reality? Most plans still don't offer crypto, but that's starting to change.
What You Can Actually Buy Right Now
Here's what's available in the real world:
Fidelity Plans - If your employer uses Fidelity, you might have access to their Digital Assets Account. This lets you put up to 20% of your 401(k) into Bitcoin directly. But your employer sets the actual limit - many cap it at 5-10%.
Other Major Providers
● Vanguard: No crypto options (and they've said they won't add them)
● Charles Schwab: Limited crypto through brokerage windows only
● Principal, TIAA, Empower: Mostly no direct crypto options yet
What Coins Are Available
Almost everything focuses on Bitcoin and Ethereum. Other cryptocurrencies are rare because:
● They're more volatile
● Less regulatory clarity
● Harder for employers to justify to employees
Self-Directed Options
Some plans offer "brokerage windows" where you can buy crypto ETFs. This requires more paperwork and education modules, but gives you broader access.
The Real Costs (This Matters)
Crypto in your 401(k) costs more than regular investments. A lot more.
Fee Comparison:
● S&P 500 index fund: 0.03-0.20% per year
● Crypto investment: 0.75-1.0% per year
● Plus custody fees: Sometimes another 0.5-1.0%
What This Means in Dollars
On a $50,000 account balance:
● Index fund costs: $15-100 per year
● Crypto investment: $375-500+ per year
Over 30 years, this fee difference could cost you tens of thousands of dollars. The question is whether crypto's potential returns justify these higher costs.
How Much Should You Actually Invest
Financial advisors who support crypto in retirement accounts recommend small allocations:
Conservative Approach: 1-2% Good for people nervous about volatility or close to retirement.
Moderate Approach: 5-10% For younger workers who want meaningful crypto exposure but still prioritize traditional investments.
What Experts Say - Most financial planners suggest treating crypto like a "satellite" investment - a small part of your portfolio that could boost returns but won't sink your retirement if it goes to zero.
Age Considerations
● 20s-30s: Can handle more crypto allocation (5-10%)
● 40s-50s: Keep it smaller (2-5%)
● Near retirement: Many experts say avoid it entirely
The Volatility Reality Check
Source - curvo.eu
Bitcoin is roughly 5 times more volatile than the stock market. Here's what that actually means:
Bitcoin vs S&P 500 (Recent Performance)
● Bitcoin annual volatility: 35-40%
● S&P 500 annual volatility: 8%
Real-World Example - In 2021, Bitcoin went from $29,000 to $69,000, then crashed to $15,500 by 2022. That's a 75% loss from the peak.
If you had $10,000 in Bitcoin at the peak, it would have been worth $2,500 at the bottom. Can your retirement handle that kind of swing?
The Upside - Bitcoin has also produced massive gains over longer periods. Someone who bought $1,000 of Bitcoin in 2015 would have over $150,000 today (despite the crashes along the way).
Who's Actually Doing This
Age Groups
● Millennials and Gen Z: 49% already own crypto outside retirement accounts
● People over 50: About 30% have considered crypto for retirement
Income Levels Higher earners dominate crypto investing. Nearly half of crypto investors make $100,000+ per year.
Current Adoption Less than 1% of 401(k) plans offer crypto right now, but industry experts predict this will grow steadily over the next few years.
How to Actually Get Started
Step 1: Check Your Plan
Log into your 401(k) account and look for:
● "Digital Assets" or "Cryptocurrency" options
● "Self-directed brokerage" or "brokerage window"
● Contact your HR department if you're not sure
Step 2: Complete Required Education
Most plans require you to:
● Watch educational videos about crypto risks
● Complete a risk assessment questionnaire
● Acknowledge you understand the volatility
Step 3: Start Small
Even if you want significant crypto exposure, consider starting with 1-2% to see how you handle the volatility psychologically.
Step 4: Set Up Automatic Investing
Just like with regular 401(k) investments, you can usually set a percentage of each paycheck to go toward crypto automatically.
What Could Go Wrong
Employer Changes Mind - Your company could decide to remove crypto options if they get spooked by volatility or legal concerns.
Regulatory Reversal - A future administration could restrict crypto in retirement accounts again.
Provider Issues - Custody and security for crypto is more complex than stocks. Technical problems or hacks could affect your investments.
Your Own Psychology - Watching your retirement account swing wildly with crypto prices can be stressful. Make sure you can handle it emotionally.
Bottom Line: Should You Do This?
Consider crypto in your 401(k) if:
● You already understand and own cryptocurrency
● You're young with decades until retirement
● You can afford to lose 5-10% of your portfolio
● Your plan offers low-cost options
Skip it if:
● You're new to crypto (learn with smaller amounts first)
● You're within 10 years of retirement
● You can't handle major portfolio swings
● The fees in your plan are extremely high
The Middle Ground - Many financial advisors suggest getting crypto exposure through a regular investment account first. This lets you learn how you react to the volatility before committing retirement money.
What's Next
More 401(k) providers will likely add crypto options over the next few years. If your plan doesn't offer it now, it might soon.
Keep an eye on:
● Your plan's annual enrollment materials
● Communications from your employer about new investment options
● Fee improvements as competition increases
The crypto retirement revolution is just beginning. Whether you participate depends on your risk tolerance, age, and belief in digital assets' long-term potential.
The opportunity is there. The choice is yours.
Want to learn more about cryptocurrency before adding it to your retirement? Start with Bitcoin and Ethereum education on Bitget.
This article is for educational purposes only. Cryptocurrency investments involve significant risks. Always consult with financial professionals before making retirement investment decisions.
