A letter, a trillion dollars: The U.S. Congress officially urges the SEC to greenlight bitcoin investments for 401(k) plans

An envelope that appears ordinary may become the lever that moves the $9.3 trillion retirement fund market.

On September 22, 2025, a letter from the U.S. House Financial Services Committee broke the delicate calm between Washington and the crypto world. The letter was jointly signed by Committee Chairman, Republican French Hill, and senior member, Democrat Maxine Waters—a signal worth pondering in itself. One is a staunch supporter of cryptocurrency, while the other has long been a cautious, even critical, regulatory hawk. Their shared goal is singular: to urge SEC Chairman Paul Atkins to swiftly implement Executive Order No. 14330, signed by President Trump on August 7.

The wording of this executive order is quite meaningful, titled "Popularizing Alternative Asset Investment Channels for 401(k) Investors." Outside the crypto industry, this might sound like yet another dry policy document. But in our industry, the energy behind the phrase "alternative assets" is enough to quicken the pulse of even the calmest trader. According to the explanatory document released by the White House, the "alternative assets" defined in the order explicitly include "actively managed investment vehicles investing in digital assets."

To put it more plainly: The highest level of the U.S. government has sent a clear signal—it's time for ordinary Americans' retirement funds to officially enter the world of cryptocurrency.

This is not just a minor policy tweak; it could be the beginning of a "final battle" that determines the ultimate market status of crypto assets. The core battlefield of this campaign is the $9.3 trillion U.S. 401(k) retirement plan market. Even if a tiny percentage of this massive fund flows into the crypto market, it will trigger an unprecedented "buying spree." Now, both parties in Congress are personally pushing this forward.

The "Prudent Man" Shackles and BlackRock's "Turnaround"

For a long time, a legal wall called the Employee Retirement Income Security Act (ERISA) has kept crypto assets out of the trillion-dollar retirement fund market. The cornerstone of this wall is the strict clause known as "Fiduciary Duty."

Simply put, this law, born nearly half a century ago, puts a "Prudent Man" legal shackle on all 401(k) plan managers (usually employers). They must make investment decisions for employees' pensions with extreme caution, ensuring the safety and stable appreciation of funds. If a decision leads to losses, they face the huge risk of class action lawsuits.

Under such strict requirements, investing in highly volatile, relatively young assets like bitcoin—which mainstream media often portray as a "speculative bubble"—is nothing short of a legal gamble. That's why, even though financial giant Fidelity bravely launched a product in 2022 allowing 401(k) investments in bitcoin, there were few takers. At the time, the Biden administration's Department of Labor even issued a stern guideline, warning all plan managers to be "extremely cautious," or face regulatory investigation. This was a cold shower for all institutions eager to try.

However, the wind shifted dramatically in 2025. First, in May, the newly appointed Trump administration Department of Labor quietly withdrew the harsh warning, replacing it with a "neutral" stance, no longer biased against specific asset classes. Then, the August presidential executive order directly "named" digital assets. Now, Congressional leaders from both parties are writing to the SEC to urge progress. The purpose of this series of moves is clear: to loosen the shackles on "Prudent Men," reducing their litigation risk for allocating to crypto assets.

This top-down policy push resonates with the attitude shift of Wall Street giants. The change in attitude of BlackRock CEO Larry Fink is most representative. A few years ago, he believed clients' long-term demand for crypto was "minimal." But by 2025, he not only publicly called bitcoin "digital gold," but also regarded it as an "international asset" to hedge against currency devaluation. In his annual letter this year, he emphasized the importance of "democratizing investment," echoing the slogan of the presidential executive order.

When policymakers and capital managers start speaking the same language, the old rules of the market begin to loosen.

The Imagination of Hundreds of Billions: A Game of Numbers and Psychology

Let's set aside complex regulations for a moment and look at the potential impact of this transformation in the most direct numbers. According to the latest data from the Investment Company Institute (ICI) as of Q2 2025, the total asset size of the U.S. 401(k) market is $9.3 trillion.

What does this mean? It exceeds the annual GDP of any country except China and the U.S.

Now, let's do a simple extrapolation:

Where Is It Stuck? The "Last Three Miles" to the Trillion-Dollar Market

Although the presidential executive order has been issued and Congress is actively pushing, this does not mean that trillions of dollars will flow into the crypto market tomorrow. The whole process is more like a series of dominoes that need to fall in sequence, and currently, it is stuck at several key points, summarized as the "last three miles" challenge:

The First Mile: The Regulatory "Final Kick"

This is the most direct and core node at present. Congress's letter is an "urge," not an "order." The ball is now in SEC Chairman Paul Atkins' court. The SEC must work with the Department of Labor (DOL) to translate the macro spirit of the presidential executive order into specific, actionable regulatory rules or safe harbor provisions.

These rules need to clearly answer the questions plan sponsors (employers) care about most: What proportion of crypto asset allocation is "prudent"? What specific risks must be disclosed to employees? Under what circumstances can they be exempt from legal liability for losses caused by market volatility? Before these specific "rules of the game" are issued, the vast majority of companies dare not risk huge litigation by proactively adding crypto assets to employees' retirement plans.

The Second Mile: The "Trust Gap" of Plan Sponsors

Even if the SEC issues clear guidelines, the real decision-making power still lies in the hands of thousands of corporate employers. They are the direct managers of 401(k) plans and the ultimate bearers of "fiduciary duty." This is an extremely conservative and risk-averse group.

For them, adding a high-volatility asset option brings potential legal trouble that may far outweigh the "credit" for seeking higher returns for employees. Therefore, they need to see mainstream financial institutions (like BlackRock, JPMorgan, Goldman Sachs, etc.) not only speak favorably, but also launch a series of mature, compliant financial products with risk-buffering mechanisms, and have them strongly recommended by professional consulting firms (such as Mercer, Aon). Crossing this "trust gap" requires time and repeated market validation.

The Third Mile: The "Product Shortage" of Market Infrastructure

Currently, crypto investment products specifically designed for 401(k) are still very scarce, and Fidelity's attempt is just a beginning. Future products need to be deeply integrated into existing retirement management systems and may take more diverse forms, such as "crypto index funds" containing bitcoin, ethereum, and other mainstream assets, or "alternative asset hybrid funds" with a small allocation to crypto. The lack of such products means that even if plan sponsors are willing, they have "nothing to work with."

The Future Roadmap: From Washington to Your Retirement Account

Based on the above nodes, we can outline a possible roadmap for bitcoin and crypto assets to enter ordinary people's pensions:

Phase One: Regulatory Positioning (Estimated 6-18 months)

• SEC and DOL issue joint guidance: This is the "starting gun" for all subsequent steps. The guidance will provide a clear regulatory framework and "safe harbor" for 401(k) plans to allocate crypto assets.
• Relaxation of qualified investor definitions: The H.R. 3394 and H.R. 3339 bills pass the Senate and are signed into law, opening the door for more knowledgeable ordinary people to invest.

Phase Two: Product Explosion and Institutional Entry (Within 1-2 years after guidance issued)

• Wall Street giants rush in: BlackRock, Fidelity, Morgan Stanley, and other top asset management companies will quickly design and launch a series of compliant crypto fund products specifically for the retirement market.
• Endorsement by advisors and rating agencies: Professional pension consulting firms begin to include these new products in their recommended lists, provide risk ratings and allocation advice, and alleviate plan sponsors' concerns.

Phase Three: Corporate Adoption and Market Penetration (Next 3-5 years or longer)

• From tech companies to traditional enterprises: The adoption process will be gradual. It will likely start with more forward-thinking tech and financial companies, and, after good results, gradually expand to more traditional industries.
• Default "Opt-in" (active choice): Initially, crypto assets will almost never be the default investment option, but will require employees to "actively choose" after fully understanding the risks. The investment ratio may also be limited to 5% or 10% of the total assets in personal accounts.

Phase Four: Long-term Impact and Deep Integration

• Continuous capital inflow: As tens of millions of employees continuously and regularly invest part of their monthly salary, the crypto market will gain unprecedented long-term, stable buying, helping to reduce extreme market volatility.
• Changing market narrative: Bitcoin will no longer be just code on traders' screens, but will truly become a concrete, visible part of the long-term wealth planning of hundreds of millions of ordinary people, and its "digital gold" consensus will be ultimately consolidated.

This road is destined to be long and full of games, but a clear roadmap has emerged. Every step of progress is worth our close attention.

Conclusion: When a Drop of Water Joins the Sea

From a digital experiment in a geek circle, to a Wall Street trading target, to now possibly becoming part of the retirement plans of hundreds of millions of ordinary people, bitcoin and the crypto world it represents are undergoing a profound identity transformation.

This letter from the House is like a starting gun. It marks that policymakers, regulators, and market giants have officially put the topic of "incorporating crypto assets into mainstream asset allocation" on the table. SEC Chairman Paul Atkins' positive attitude almost suggests that regulatory green lights are only a matter of time.

Of course, the floodgates will not open completely overnight. In the early stages, there may be strict investment ratio limits (such as no more than 5% of total assets), and investment methods may be limited to "actively managed funds" rather than direct spot purchases. The cautious attitude of plan sponsors (employers) will not disappear immediately either; they need time to observe the market and assess risks.

But this trend is already irreversible. When tens of millions of ordinary people invest part of their monthly salary into the crypto market through 401(k) plans, like a trickle, continuously and steadily, the resulting force will be enough to change the entire industry ecosystem. It will bring unprecedented long-term, stable buying to the market, smooth out some volatility, and further promote the maturity of infrastructure such as compliance, custody, and insurance.

This is no longer a question of "if it will happen," but a question of "when and how it will happen." The $9.3 trillion "living water" is standing outside the gate, and Washington's gatekeepers seem ready to turn the key. For everyone in the crypto industry, this is both a huge opportunity and a sign of more mainstream scrutiny and stricter challenges. The wheel of history is slowly turning, and we are right in the midst of it.