Labor Department Proposal Could Open 401(k)s to Bitcoin and Alternative Assets

The U.S. Department of Labor has unveiled a sweeping proposed rule that could significantly expand the range of investment options available in 401(k) retirement plans, marking a potential turning point for alternative assets — including crypto — within tax-advantaged retirement accounts.

Released Monday by the department’s Employee Benefits Security Administration, the proposal aims to reduce regulatory uncertainty and litigation risk for fiduciaries considering alternative investments.

The move follows an executive order from Donald Trump directing agencies to “democratize access” to non-traditional assets in retirement portfolios.

At its core, the rule reinforces that fiduciary responsibility under the Employee Retirement Income Security Act is grounded in process rather than outcomes.

Plan managers would retain broad discretion to include a wide array of investment options — provided they follow a prudent, well-documented evaluation process assessing factors such as fees, liquidity, valuation, and performance benchmarks.

Labor Secretary Lori Chavez-DeRemer said the proposal is designed to align retirement investing with modern financial markets. “This greater diversity will drive innovation and result in a major win for American workers, retirees, and their families,” she said.

JUST IN: 🇺🇸 US Department of Labor proposes rule that would allow Bitcoin investments in 401(k)s. pic.twitter.com/JwQI0Ur4z1

— Bitcoin Magazine (@BitcoinMagazine) March 30, 2026

Bitcoin gets exposure

The guidance could open the door for increased exposure to digital assets like Bitcoin within 401(k) plans — a development long sought by segments of the crypto industry. While plan sponsors have technically always been permitted to consider such assets, regulatory ambiguity and prior guidance had a chilling effect.

In 2022, the Biden administration issued a compliance release cautioning fiduciaries against offering cryptocurrency in retirement plans, citing volatility and investor protection concerns.

That stance is now being reversed, with Deputy Labor Secretary Keith Sonderling emphasizing neutrality. “The department’s days of picking winners and losers are over,” he said.

The proposal does not explicitly endorse crypto or any specific asset class. Instead, it establishes “safe harbor” frameworks designed to protect fiduciaries who undertake thorough due diligence when adding alternative investments to plan menus.

This process-based approach could make it easier for asset managers to introduce diversified funds that include exposure to private equity, real estate, or digital assets or Bitcoin.

Assets like Bitcoin could enhance long-term returns and provide a hedge against inflation, particularly for younger savers with longer time horizons.

The U.S. Securities and Exchange Commission and the U.S. Department of the Treasury both collaborated on the rulemaking, signaling a broader interagency effort to modernize retirement investing.