And if deciding how to invest 401(k) money isn’t perplexing enough, we soon could be staring down some ridiculously overwhelming new options — including whether to buy bitcoin or turn to private equity as a way to juice up retirement returns.
The U.S. Securities and Exchange Commission, the Labor Department and the Treasury are tasked now with working out regulatory details for paving the way for alternative investments, including cryptocurrency, to be offered in 401(k) plans.
Ultimately, 401(k) investors could get access to cryptocurrency, private equity and other alternative investments in retirement savings plans at work, thanks to an executive order signed by President Donald Trump on Aug. 7.
In his executive order, Trump blamed “regulatory overreach and encouragement of lawsuits filed by opportunistic trial lawyers” for stifling investment options, such as crypto, in 401(k)s.
One argument being made by Trump and bitcoin backers is that alternative investments already are part of the mix for traditional pension plans. Why not 401(k) plans, too?
Trump’s executive order pointed out that alternative investments, including cryptocurrency, are “an increasingly large portion of the portfolios of public pension and defined-benefit retirement plans.”
Michigan’s largest public pension plan, for example, held approximately $44 million in bitcoin and $30 million in ethereum exchange traded funds as of Sept. 10, totaling $74 million. The cost basis was $37.5 million, meaning the Michigan Retirement System nearly doubled its original investment with a gain of $36.5 million to date.
Yet, the combined holdings represent a fraction of 1% of the retirement system’s total $115 billion portfolio. “Cryptocurrency is not a big focus of our investment strategy,” said Ron Leix, a spokesman for the state treasury.
Leix pointed out that the state’s retirement system was recognized by NASDAQ eVestment as having one of the best five-year returns among large public pension plans in the United States as of June 30.
Not surprisingly, those who are bullish on bitcoin and other cryptocurrencies applaud what they see as a new opportunity to enable everyday investors to expand their horizons.
Bitcoin is a digital currency, launched in 2009, that can be used to buy goods or services with relative anonymity and without the need for a central authority, such as a bank or government. Devotees say the value comes from the scarcity, as bitcoin’s algorithm caps the supply at 21 million digital coins.
Ronnie Bedway, known as the “Bitcoin Butcher” on social media platforms, says the ability to own bitcoin and other cryptocurrency in a 401(k) plan will open the doors to more investors, particularly young savers, to what’s likely to be a burgeoning area.
Bedway is a third generation owner of Ronnie’s Meats in Eastern Market in Detroit. For a Detroit trivia night point, Ronnie’s made a name 50 years ago during the “Corned Beef War” with Wigleys in Eastern Market. Tens of thousands of pounds of brisket were sold at deep discounts in the friendly battle in 1975.
Ronnie’s Meats was named after the founder, the young Ronnie Bedway’s grandfather who opened the butcher shop in 1967. Tom Bedway is the son of the founder and father of the “Bitcoin Butcher.”
Bedway, 36, started studying bitcoin in 2017, the original blockchain and cryptocurrency. But Bedway didn’t first invest in bitcoin until 2020 when bitcoin was trading at roughly $7,000. Some friends from college bought into the bitcoin story, including as an inflation hedge. Bedway also had been impressed after listening to podcasts by Michael Saylor, entrepreneur and bitcoin evangelist.
“Gold wasn’t sexy enough,” Bedway said.
Back in 2017, Bedway said, many people probably just logged into the Coinbase website to buy bitcoin via the crypto exchange platform. Now, there’s an exchange traded product called IBIT or the iShares Bitcoin Trust ETF or some investors buy stock in companies that leverage their corporate balance sheet to invest in cryptocurrency.
“The two biggest themes going forward are artificial intelligence and cryptocurrencies,” Bedway said.
He’s been focusing lately on former bitcoin mining companies that are now reallocating their power to artificial intelligence, like Iren Limited and Cipher Mining.
“I am 36,” Bedway said, “I can take a few more chances that maybe average investors are unwilling to do and kind of wait for the thesis to play out.”
Some crypto enthusiasts say that the president’s executive order is only a response to what many people already want.
For years, many workers have been questioning why bitcoin isn’t being offered in their retirement plans, according to Elizabeth Hansson, president of the Stand with Crypto Michigan Chapter and chief technology officer of Blockchain Exploration Corp.
“This is very much the future of money. Digital assets will be incorporated into every aspect of our financial life in the near future,” Hansson said.
“And people are starting to see this.”
The executive order, she said, will give employers the option to add alternative investments, like cryptocurrency, to the mix of investments in a 401(k) plan.
Hansson said adoption won’t happen overnight because the regulatory process still needs to unfold. The Aug. 7 executive order, she said, directs the Department of Labor in coordination with the SEC and Treasury to reexamine fiduciary guidance, propose new rules and potential safe harbors, and issue clarifications within 180 days.
After that, investment firms will develop compliant products and employers will update their plans.
“I expect some employers — especially those with younger, tech-savvy workforces — will move quickly once the framework is in place, and more will follow as guardrails and education build confidence,” Hansson said.
Employers, she said, will still decide what makes sense for their workers.
She likes to refer to Trump’s executive order as “permissive, not prescriptive.”
“It opens the door without pushing anyone through it,” Hansson said.
Holding cryptocurrency in a 401(k) could have potential tax advantages. A traditional 401(k) would allow pre-tax contributions to grow on a tax-deferred basis for years; taxes are paid based on ordinary income tax rates when the money is withdrawn in retirement. Holding the investment in a Roth 401(k) would allow qualified withdrawals to be taken tax-free.
Hansson estimates that some 1 million people likely own cryptocurrency already in Michigan, though, no exact figure exists.
The advocacy group Stand With Crypto has more than 45,000 engaged crypto advocates in Michigan, she said, with high concentrations in Oakland County, Wayne County and the Grand Rapids area.
Make no mistake, we’re talking about what’s been a wild, unfolding shift in acceptance. Trump, once a well-known crypto skeptic, now has promised to make the United States the “crypto capital of the world.”
We’ve read plenty of headlines indicating how Trump and his family have embraced crypto in a variety of ways. Early in September, American Bitcoin, the crypto-mining company co-founded by Eric Trump, went public and began trading on the Nasdaq stock exchange.
Days after the executive order was signed, bitcoin hit an all-time high in trading of $124,457 on Aug. 14. Much of the rally kicked off in late 2024 on the theory that a second Trump administration would offer a friendly, regulatory environment for cryptocurrencies.
Having cryptocurrency available as an option in a 401(k) plan would make it even easier to say “why not” and take a chance on investing in bitcoin and other cryptocurrency. But experts warn that the risks for sudden, dramatic drops in price remain.
The highly volatile investment isn’t for the faint of heart.
Dramatic, double-digit fallouts have taken hits more than once. Bitcoin crashed by 84% in just one year, for example, from December 2017 to December 2018 when bitcoin closed at $3,815 on Dec. 30, 2018.
Right now, bitcoin has been riding high.
In the past 12 months alone, Bitcoin has doubled in value since it closed at $58,127.01 on Sept. 12, 2024. Bitcoin closed at $116,394.70 on Sept. 12, 2025.
Most of us, of course, aren’t investing in bitcoin and aren’t even sure how bitcoin works. Unlike a dollar bill, you cannot pull a bitcoin out of your pocket.
Coinbase notes: “Unlike a normal wallet, which can hold actual cash, crypto wallets technically don’t store your crypto. Your holdings live on the blockchain, but can only be accessed using a private key.”
And your keys prove your ownership of your digital money and allow you to make transactions. “If you lose your private keys, you lose access to your money,” Coinbase notes. “That’s why it’s important to keep your hardware wallet safe.”
A Gallup poll released in July indicated that one in seven U.S. adults, or 14%, report owning cryptocurrency now, with few others intending to buy it soon.
Some 60% of adults surveyed, according to the poll, indicated that they are not interested in ever buying cryptocurrency, indicating that they believe it is too risky.
The findings come from a June 2-15 survey of U.S. adults aged 18 and older, conducted by the web using the probability-based Gallup Panel.
The poll was conducted before Trump signed the GENIUS Act on July 18, which according to the White House will “make America the undisputed leader in digital assets, bringing massive investment and innovation to our country.”
Cautionary advice continues, as even Bedway says retirement savers will need to take into account their age and how close they are to retirement, as well as other factors before deciding how much they want to invest in cryptocurrency, if at all.
“There’s a lot of fanfare around this,” said J.J. Conway, who has a law firm in Royal Oak which specializes in the litigation of employee benefits cases.
Conway says he doesn’t want to take a completely dim view on alternative investments being offered in 401(k) plans. Higher earners in their 30s and 40s and more sophisticated investors might indeed benefit if they can withstand the volatility, he said.
But the average worker, someone who is punching a clock or coming in at a highly restrictive salary, might not be able to take on that kind of risk, he warned.
He asks: Will the higher chance of losing money with alternative investments, like cryptocurrency or private equity, make sense for someone who is older, maybe even a widow or widower, and must deal with living on a fixed income?
“Does this make sense? And I don’t think the case has been made for that,” Conway said.
Regulators, he said, also are being tasked with figuring out how to insulate those who provide alternative investments to retirement savers from potential liability. “If this is so good, what’s the concern? Why would you be thinking about lawsuits?”
Another concern, he said, is that the alternative investments typically involve extremely high fees that will cut into a retirement saver’s profits.
Alicia H. Munnell, senior advisor of the Center for Retirement Research at Boston College, calls offering bitcoin in 401(k) plans a “terrible idea.”
“Participants don’t understand the product,” she wrote in an essay in June. “It’s a speculative and volatile investment, straying from traditional investments is unlikely to enhance returns, and it’s probably not a prudent option for 401(k)s.”
While the gambling has paid off for some, she wrote, adding bitcoin to 401(k) plans “introduces unnecessary risk, and it is unlikely to improve returns.”
She and others have similar feelings about adding private equity investments into the 401(k) mix.
Sam Huszczo, a chartered financial analyst and founder of SGH Wealth Management in Southfield, said many people will need to move carefully if they want to select any alternative investments for their 401(k) plan once those options are offered.
When it comes to private equity deals that could show up in your 401(k), Huszczo warns that many of those deals likely will be offerings that were that rejected by nearly every single billionaire in America. Think of some offerings as “the scrap heap” of rejects.
No one, of course, is financially clairvoyant when it comes to the crypto story, private equity offerings or the odds for any other alternative investments might pop into your 401(k) plan. Putting any money in these types of investments will be new to most people, but old advice remains truer than ever: Buyer beware.
Contact personal finance columnist Susan Tompor: stompor@freepress.com. Follow her on X @tompor.
