Lawmakers Push 401(k) Crypto Access, Billions at Stake

Nine congressional leaders have formally urged SEC Chair Paul Atkins to act on an executive order from former President Donald Trump that would ease restrictions on retirement plans holding cryptocurrencies. The lawmakers’ letters to the securities regulator represent a significant political push to modernize retirement investment options for approximately 90 million Americans with 401(k) accounts. The initiative focuses on loosening specific investor protection rules that currently prevent retirement plans from including alternative assets like Bitcoin, Ethereum, and XRP in their portfolios.

The involvement of House committee chairs French Hill and Ann Wagner signals serious congressional interest in expanding retirement investment options. Their pressure on the SEC comes as public retirement systems are already beginning to cautiously enter the crypto space. The State of Michigan Retirement System, for instance, has increased its holdings in Bitcoin and Ethereum trusts, demonstrating that institutional adoption is no longer theoretical but already underway in the public sector.

Market analysts have put forward a compelling scenario where even minimal crypto allocations could transform digital asset markets. A 1% to 2% allocation across the $12 trillion 401(k) market would translate to approximately $120 billion to $240 billion flowing into cryptocurrency assets. To put this scale in perspective, Bitcoin exchange-traded funds have drawn $57 billion since January 2024, during which Bitcoin’s price climbed from $45,000 to $124,457 and the global crypto market grew from $1.65 trillion to over $4.17 trillion.

The potential impact extends beyond mere market capitalization growth. Analysts project that if global retirement funds managing approximately $50 trillion allocated just 1% ($500 billion) to XRP, a simple linear estimate could push the token’s price near $12. With wider multiplier effects, projections range from $17 to $34 per token. Similarly, a 2% allocation to Bitcoin could potentially lift its price to about $175,000 and push Bitcoin’s market capitalization near $3.4 trillion, fundamentally altering the digital asset landscape.

Market commentators including Paul Barron suggest that retirement money would likely flow into cryptocurrency through exchange-traded funds rather than direct coin purchases. ETFs represent familiar, regulated investment vehicles that many retirement plans already utilize for traditional assets. The availability of crypto ETFs could be particularly transformational for XRP, providing a structured pathway for institutional capital that might otherwise remain on the sidelines due to regulatory concerns or operational complexities.

This regulatory debate gained an unconventional voice when decentralized exchange First Ledger declared that 401(k) accounts and XRP are ‘basically the same thing’ in their aim to grow long-term value. While the comparison drew attention for its bluntness, it underscores a fundamental shift in how digital assets are being framed—not as speculative instruments but as tools for long-term value transfer and preservation. First Ledger’s comparison specifically likened XRP’s role in cross-border settlement to the steady, long-term goals of retirement savings, positioning the token as a utility with enduring value rather than a purely speculative asset.

The movement toward 401(k) crypto access represents more than theoretical debate—it reflects an evolving financial landscape where digital assets are increasingly seen as legitimate portfolio components. The fact that public retirement systems like Michigan’s are already adding crypto exposure lends credibility to the argument that broader 401(k) access is a natural progression rather than a radical departure from current practice.

As the SEC considers this pressure from lawmakers, the financial industry watches closely for signals about how quickly retirement investment options might evolve. The combination of political pressure, existing institutional adoption, and clear mathematical projections about market impact creates a compelling case for regulatory action. Whether through ETF structures or other regulated vehicles, the potential integration of cryptocurrencies into America’s retirement system represents one of the most significant convergence points between traditional finance and digital assets to date.