Happy Thursday advisors!
In today’s newsletter, David Lawant, head of research at Anchorage Digital, examines the evolving role of crypto in 401(k)s as regulatory clarity is poised to open up investments.
Next, in Ask an Expert, Kevin Tam answers questions about crypto adoption around the world by examining recent 13F filings.
Happy reading.
Modernizing the Nest Egg: The Past, Present, and Future of Crypto in 401(k) Plans
The U.S. retirement system is about to reach a structural inflection point. For more than a decade, the $10 trillion 401(k) market remained isolated from crypto assets due to regulatory ambiguity and litigation concerns. However, a decisive shift in federal policy makes 2026 the year of integration, which in the long term will move crypto from the periphery to the institutional core of the U.S. retirement system.
The shift in regulation from “extreme caution” to “principle neutrality” and “democratization of access.”
The Department of Labor (DOL) is responsible for ensuring that ERISA, the 1974 federal law that sets minimum standards for most voluntarily established retirement and health plans in the private sector, is at the epicenter of this problem. In March 2022, it released Compliance Support Release #2022-01. This version created a de facto ban on crypto assets in retirement plans by requiring fiduciaries to exercise “extreme caution” and threatening targeted investigations for those engaging in crypto assets.
On May 28, 2025, the DOL officially abandoned the “extreme caution” standard with Compliance Assistance Release No. 2025-01. This release officially rescinded the restrictive 2022 guidance, stating that the previous position had “departed from the requirements of ERISA” and the Department’s “historically neutral and principles-based approach.” The reversal restored the legal standard set by the Supreme Court that fiduciaries must act prudently based on a contextual assessment of risk and return, rather than adhering to categorical prohibitions on specific asset classes.
But the real catalyst came with President Donald Trump’s Executive Order 14330, signed on August 7, 2025. Titled “Democratizing Access to Alternative Assets for 401(k) Investors,” this directive fundamentally redefined the government’s position from a cautious tone to an affirmative mandate to facilitate access to “alternative assets,” which the order explicitly defines to include crypto assets among more established classes such as private equity and real estate.
Upcoming DOL Guidance on Alternative Assets and What Their Adoption Could Look Like
Last January, the DOL submitted a proposed rule that would clarify its position on alternative assets and the appropriate fiduciary process. The document is not yet public and is still in the hands of the Office of Management and Budget (OMB), but given that the White House’s 180-day deadline has already expired, it is expected to be released for public comment very soon.
For crypto in particular, the focus is on designing the next fiat safe harbor. This regulatory “checklist” aims to immunize trustees from liability for investment losses, provided specific standards are met. Its core pillars should include qualified custody requirements, liquidity constraints, and portfolio allocation caps.
However, even once the major regulatory hurdle is overcome, widespread adoption will likely play out more like a glacial shift over several years than a speculative spark.
The evolution of high-friction self-directed brokerage accounts (SDBAs) toward seamless inclusion in core menus and target date funds relies on a myriad of critical factors, including fiduciary buy-in and platform compatibility. Investment consultants like Mercer, Aon and Willis Towers Watson play a critical gatekeeper role and, while they tend to tread cautiously, allocation to alternatives emerges as a priority issue. At the same time, the industry must bridge the gap between traditional “mutual fund plumbing” and digital asset infrastructure to ensure 401(k) platforms can seamlessly manage the new asset class.
Nonetheless, the 401(k) market is critical not only because of its size, but also because of its unique flow profile that acts as a mechanical shock absorber for volatility. Since retirement participants are price inelastic, their biweekly, non-discretionary employee contributions provide a stabilizing supply that persists regardless of short-term market sentiment. This effect is enhanced by managed accounts and target date funds (TDFs), which institutionalize “buying on the dip” by automatically purchasing assets during market corrections to restore target weightings.
Unlike the very rapid debut of cash exchange-traded funds (ETFs), the shift to retirement accounts will likely be a wave that builds over years. Yet the unique size and stability of this investor base makes 2026 the year that crypto’s role in the American nest egg became an undeniable and permanent fixture.
– David Lawant, Research Manager, Anchorage Digital
Ask an expert
Q: What do Norges Bank and foreign hedge funds have in common?
Foreign hedge funds in Hong Kong and the United Kingdom are showing a huge appetite for regulated exposures, massively accumulating spot Bitcoin ETFs to build their portfolios. Laura Ltd. recently emerged with a 100% portfolio concentration IBIT.
Looking at pension fund growth, South Korea’s National Pension Service increased its MSTR exposure to $93.6 million, far surpassing the $3.5 million position held by Investment Management of Ontario (IMCO).
In the fourth quarter, the Central Bank of Norway opened a new MSTR position valued at $536 million.
Q: Is Canada’s bet on Bitcoin starting to cool down?
National Bank of Canada reduced its stake in MSTR by 51% in the fourth quarter of 2025, reducing the shares simultaneously with the share price decline. The bank’s position fell from $659 million to $152 million during this quarter. Notably, the bank also holds $52.4 million in put options on MSTR.
Q: What does the global regulator’s roadmap tell us about Bitcoin’s trajectory to 2026 and beyond?
The direction is towards legalization. Regulatory timelines show coordinated global development with MiCAR implemented across the EU in June 2025, the GENUIS Act signed in the US in July 2025, and Hong Kong, Singapore and the UAE all establishing formal frameworks for digital assets. Looking further ahead, the Canadian Securities Administrators are expected to propose amendments allowing for broader tokenization of securities and ETFs in the fourth quarter of 2026.
Driven by regulatory clarity and continued adoption of digital asset ETFs, institutional investors view them as strategic assets for diversification and long-term growth.
– Kevin Tam, Digital Asset Research Specialist
