TLDR
- Bitcoin dropped 50% from its October peak, erasing $2 trillion in crypto market value and sparking debate about crypto in 401k retirement plans
- President Trump’s August executive order allowed 401k plans to include digital assets, and SEC chair Paul Atkins supported opening retirement markets to crypto
- BlockTrust IRA, managing $70 million in retirement funds, admitted it didn’t exit the market fast enough during the recent crash
- Lee Reiners from Duke Financial Economics Center argues 401ks should focus on secure retirement savings, not speculative assets
- Franklin Templeton sees blockchain technology and tokenized assets as the future for modernizing the retirement industry structure
Bitcoin fell 50% from its peak in October. The drop wiped out $2 trillion in market value. The crash has sparked debate about whether crypto belongs in American retirement accounts.
The 401k market holds $12.5 trillion in assets. These accounts are designed for stable, long-term growth. Crypto’s recent volatility has raised questions about its place in retirement planning.
Lee Reiners teaches at the Duke Financial Economics Center. He also co-hosts the Coffee & Crypto podcast. “401ks exist to help people save for a secure retirement, not gamble on speculative assets with no intrinsic value,” Reiners said.
President Donald Trump signed an executive order in August. The order allowed 401k plans to invest in alternative assets, including crypto. SEC chair Paul Atkins spoke about crypto in retirement accounts last week, just before the market crashed.
Agree, let’s do it! https://t.co/nmBiOG55N2
— Brian Armstrong (@brian_armstrong) January 30, 2026
Atkins said “the time is right” to open retirement markets to crypto. The market collapse happened days after his statement. The timing may push retirement fund managers away from crypto investments.
Many 401k plans already have indirect crypto exposure. Large crypto companies like Coinbase are included in major equity indices. Reiners believes this indirect exposure is enough.
The BlockTrust Experience
BlockTrust IRA manages an AI-powered retirement platform. The company added $70 million in IRA funds over the past 12 months. The recent crash caught the firm off guard.
Chief Technical Officer Maximilian Pace spoke about the crash. “Last week, we did not get out as quickly because a lot of the underlying fundamental data we’re looking at is still very strong,” Pace said in an interview with CoinDesk.
The firm’s Animus Fund performed well in 2025. The fund was up 27% from January to December 2025. Bitcoin buy-and-hold strategies lost 6% to 13% during the same period.
Pace thinks about crypto investments differently. He suggests viewing 401k crypto investments over five to 10 years. “You would be better thinking like a venture capitalist rather than like a day trader,” Pace said.
The company relies on broad analytics. These work better over longer timelines than short-term trading. BlockTrust says it is “not necessarily wavered by volatility.”
Blockchain Technology for Retirement
Robert Crossley works at Franklin Templeton. He serves as global head of industry and digital advisory services. Crossley sees blockchain technology changing retirement management.
The current retirement industry is siloed and slow-moving. It also faces heavy regulation. Crossley believes onchain wallets holding tokenized assets could revolutionize the system.
“Whether you are a saver, an investor, a spender, you have all of these different financial activities which are currently serviced very differently by different providers in your life,” Crossley said. Blockchain technology could eliminate this fragmentation.
Tokenized assets become software. “That software can be an asset, but it also could be a benefit, it also could be a liability. It could be a whole 401(k),” Crossley explained.
Reiners doubts employers will add crypto to 401k plans. He cites legal concerns about employee lawsuits. “Unless Congress changes the law, plan sponsors are unlikely to include crypto, or ETFs, as plan options,” Reiners said.
The crypto industry remains young and volatile. Traditional markets like the S&P 500 have government protections and regulatory frameworks. Crypto lacks these safeguards during market crashes.
