US President Donald Trump has signed a decree that will allow alternative investments such as private equity, real estate, Bitcoin and cryptocurrencies to be included in tax-advantaged pension plans - the so-called "401(k)s". Around USD 9 trillion is held in these pension savings models, which represent a fundamental pillar of the US capital and pension market.
Bitcoin and crypto in 401(k)s
Trump's plan to open up 401(k)s to alternative investments such as cryptocurrencies has been in place since mid-July. bekannt. At the time, the Financial Times quoted insiders who had been informed of the Trump administration's plan.
A 401(k) is a private retirement savings account used by around 90 million US employees to invest a portion of their gross income in the capital market on a tax-privileged basis for their own retirement. Taxes on the investment gains are only incurred when they are withdrawn. Employers often also offer a "matching contribution", whereby they subsidize part of the employee's contributions.
With today's signing of the aforementioned executive order, first reported by the Financial Times berichteteit is now official.
The Department of Labor is directed to reevaluate the guidelines for alternative investments in retirement plans subject to the Employee Retirement Income Security Act (ERISA) of 1974.
In close coordination with the Department of the Treasury, the U.S. Securities and Exchange Commission SEC and other authorities, the aim is to examine whether regulatory adjustments are required in order to integrate alternative asset classes into professionally managed funds.
In addition, the government should clarify what fiduciary duties apply when offering asset allocation funds with the more exotic investment opportunities. In addition, the SEC is asked to facilitate access to alternative assets for retirement plans.
In 2022 warnte the U.S. Department of Labor was still reluctant to offer cryptocurrencies in 401(k) plans. The reason given was that Bitcoin and co. were too speculative and volatile to be a suitable form of investment for retirement provision. This assessment had a clearly deterrent effect on many financial service providers.
Given the early stage of development of cryptocurrencies, the Department expresses considerable doubt as to whether it is responsible to expose participants in a 401(k) plan to direct investments in cryptocurrencies or products based on them.
US Department of Labor in March 2022
9 trillion US dollars with access to BTC
There are around 9 trillion US dollars in 401(k)s. This sum corresponds to more than 4 times the Marktkapitalisierung of Bitcoin. Even if only a small portion of this capital were to flow into Bitcoin, this could drive the price up significantly. The Bitcoin price reacted positively when Bloomberg reported this morning berichtetethat the decree will be signed this Thursday.
However, easier access to certain asset classes does not necessarily mean that this will be used. BloombergETF-expert Eric Balchunas believes that the vast majority will not be interested in the expanded offering and will stick with a standard portfolio - such as the popular target-date funds, which adjust the asset allocation to the planned retirement age.
I'm a fan of choice, but all of these things should require a bit of education. However, I think the vast majority won't care and will opt for a simple, low-cost Portfolio "Target Date Fund" type product.
Eric Balchunas
Also, there are already opportunities to buy bitcoin as part of tax-advantaged retirement plans. The asset manager Fidelityfor example, has been allowing customers to hold Bitcoin directly via their 401(k)s for some time. Nevertheless, due to the frequent lack of a Bitcoin option in retirement plans, savers who wanted to benefit from Bitcoin's success often had to switch to shares in companies such as Strategy have had to switch.
Trump's pro-crypto policy remains on track
US President Trump's new executive order is a further step in his plan to make the US the "crypto capital" and "Bitcoin superpower" of the world. Trump is tearing down barriers that have so far prevented the traditional financial world and the Bitcoin market from converging.
Shortly after he took office, the SEC overturned Directive SAB 121, which made it virtually impossible for traditional banks to hold crypto assets for their customers. Trump is also planning to Dekret that penalizes banks for discriminating against conservatives and crypto firms.
A positive regulatory environment that helps to further legitimize Bitcoin should further boost the price of the most important cryptocurrency - especially if it becomes common practice to invest part of one's retirement savings in Bitcoin.
$BTC (-0,29 %)
https://www.blocktrainer.de/blog/trump-bringt-bitcoin-und-co-in-altersvorsorgeplaene
