Experts Predict Cryptocurrency Asset Order in 401(k) Will Create Hundreds of Billions in Capital Flows to Digital Asset Market.
Information about President Donald Trump's planned order allowing Americans to add Bitcoin and Ethereum to 401(k) portfolios has caused a strong price increase in the cryptocurrency asset market. Analysts believe this move could bring billions of dollars into digital assets, creating a structural change in how Americans invest for retirement.
Tom Dunleavy, Venture Director at Varys Capital, shared with Decrypt: "Every two weeks, when most Americans receive their salary from employers, a portion - usually 1% to 10% - is allocated to 401(k). Typically, the allocation ratio is about 60% stocks, 40% bonds. If now 5% of this shifts to cryptocurrency assets, you could see billions of dollars flowing into this market in the coming years."
According to Bloomberg, the order will allow individuals to hold alternative investments such as private equity capital, real estate, and cryptocurrency assets. Immediately after the news, Bitcoin rose to $116,305 (+1% in 24 hours), while Ethereum reached $3,816 (+4% in the same period). Dunleavy emphasized that this steady capital flow will also help create a more stable "floor price" for the market.
Potential for Hundreds of Billions in Capital Flows
Ryan Rasmussen, Head of Research at Bitwise, noted: "The short-term impact of this 401(k) order is to send a strong message to investors that the 'regulatory awakening' period for cryptocurrency assets has arrived and is here to stay. This is clearly pushing the market upward."
401(k) is a popular retirement account type in the US, holding trillions of dollars in assets with most individuals contributing regularly through employers or salary deductions. Rasmussen analyzed the enormous potential: "If cryptocurrency assets occupy 1% of total 401(k) assets, that's $125 billion in new capital flowing into the market, along with subsequent steady cash flow. If it's 3%, the number is $375 billion, and 5% would be $625 billion."
He emphasized that in the medium and long term, the order and response from 401(k) plan providers will "channel" tens or even hundreds of billions of dollars in capital into cryptocurrency assets. "That's a very large and sustainable long-term buying pressure," Rasmussen confirmed.
Both Rasmussen and Dunleavy believe Bitcoin and Ethereum will benefit the most from this announcement, thanks to their listed ETF products that have attracted billions in capital flows this year. "These cryptocurrency assets already exist as ETFs and will be the easiest funds for 401(k) plan providers to approve and add to investment portfolios," Rasmussen explained.
However, other cryptocurrency assets may benefit in the future, especially as more ETFs are launched. Dunleavy suggests Solana could be the next name if it gets its own ETF. Currently, many Solana ETF profiles, including staking, are still awaiting SEC approval, but some experts predict the likelihood of approval before the end of the year is "almost certain".
Solana is currently up 0.5% in 24 hours, trading at $169.44, which is 42% lower than its historical peak of $293.31 in January. On the Myriad Markets platform, the prediction for Solana reaching a new peak in 2025 is only at 30%.
The views of these two experts also align with those of famous Bitcoin investor and Galaxy Digital founder Mike Novogratz, who believes Trump's order will lead to massive capital inflows into the cryptocurrency asset market. This consensus from top experts shows the enormous potential of the new policy in changing the retirement investment landscape in the US.
