Trump to sign executive order that will allow alternative assets like cryptocurrencies, private equity in 401(k)s

President Trump is expected to sign an executive order Thursday that would allow private equity and other alternative assets into 401(k) retirement accounts. This move marks a significant shift in capital markets and could lead to private equity becoming even more widespread.

Currently, federal rules prevent most defined-contribution retirement plans from investing in alternative assets like private equity, private credit, and cryptocurrencies, as these are generally viewed as violating fiduciary duty. As a result, most 401(k) funds stick to stocks and bonds. During Trump’s first term, he issued guidance to ease these restrictions, but the Biden administration later rescinded that language.

This new executive order goes a step further. A White House official said it will instruct the Department of Labor to reevaluate existing interpretations of the rules and, if needed, propose regulatory changes. It will also ask the SEC to revise its rules and guidance to better support retirement fund investments in alternative assets.

For the private equity industry, this change opens the door to trillions of dollars in potential investment. The timing is especially important, as many traditional investors—such as public and corporate pensions, endowments, and sovereign wealth funds—have been scaling back due to a slowdown in returns. Allowing 401(k) plans to invest in alternatives could provide a much-needed influx of capital after several challenging fundraising years.