The new executive order that US President Donald Trump is expected to sign brings with it a significant change to 401(k) retirement savings plans.
The new regulation will allow Americans to invest in private equity, real estate, cryptocurrencies and other alternative investment vehicles through 401(k) plans.
Trump’s move aims to offer investors a broader range of returns by expanding beyond traditional market instruments. The extent to which cryptocurrencies, in particular, will benefit from this regulation is already attracting attention.
The total size of the 401(k) market in the US is approximately $8 trillion. If even a small portion of these assets were to be invested in cryptocurrencies, the market could experience a significant influx of capital. Here are the amounts cryptocurrencies could potentially attract from this market:
- 1% share: $80 billion
- 2% share: $160 billion
- 3% share: $240 billion
- 4% share: $320 billion
- 5% share: $400 billion
- 10% share: $800 billion
Calculated according to the current BTC/USD exchange rate, the Bitcoin equivalent of these figures is as follows:
- 1% share: 687,498 BTC
- 2% share: 1,374,996 BTC
- 3% share: 2,062,493 BTC
- 4% share: 2,749,991 BTC
- 5% share: 3,437,489 BTC
- 10% share: 6,874,978 BTC
According to this chart, even a mere 5% allocation could absorb nearly the entire Bitcoin supply available on the market.
*This is not investment advice.