The U.S. government expands the investment scope of 401(k) retirement savings, Crypto Assets may welcome new opportunities.

Recently, the U.S. government signed an executive order allowing American citizens to invest their 401(k) retirement savings in alternative assets such as Crypto Assets, private equity, and real estate. This decision could bring new growth momentum to the Crypto Assets market.

According to the executive order, the Department of Labor needs to reassess the guidance regarding alternative asset investments in 401(k) plans and other defined contribution plans under the Employee Retirement Income Security Act (ERISA) within 180 days. At the same time, the Secretary of Labor needs to clarify the department's position on alternative assets and provide a fiduciary process related to asset allocation funds that include alternative asset investments. In addition, the U.S. Securities and Exchange Commission (SEC) will also revise relevant regulations and guidance to facilitate access to alternative assets for participants in defined contribution retirement savings plans.

This move marks a significant shift in the U.S. government's attitude towards Crypto Assets. Previously, the Department of Labor had warned trustees to exercise extra caution when considering the inclusion of Crypto Assets in 401(k) plan investment options. However, in May of this year, that guidance was completely withdrawn.

As a result of this news, the Crypto Assets market has shown a positive reaction. Data shows that Bitcoin has risen nearly 2% in 24 hours, while Ethereum has increased by more than 7%.

401(k) plans are among the most common retirement plans for employees of private companies in the United States. It allows employees to contribute a portion of their pre-tax wages into a designated account, and employers typically provide a matching contribution at a certain percentage. According to a report by the Investment Company Institute (ICI), 401(k) plans currently hold $8.7 trillion in assets, with over 90 million Americans participating in employer-sponsored defined contribution plans.

Industry insiders have mixed reactions to this initiative. Some analysts believe that if 5% of the 401(k) funds are invested in Crypto Assets, it could bring hundreds of billions of dollars in new capital to the market. However, some experts also warn that this decision may pose certain risks and challenges.

First, investment costs can erode returns. Private equity funds typically charge a management fee of 2% per year, plus 20% of the fund's profits. Secondly, related litigation cases may increase, as losses in private investments can lead to legal disputes against managers. In addition, alternative assets such as private equity often lack liquidity, which may result in investors' funds being locked up for an extended period.

Although the executive order has been signed, actual implementation may still take some time. Major 401(k) plan providers like Fidelity and Vanguard need to develop suitable products, a process that may take several years.

Overall, this policy change has opened up new investment avenues for the Crypto Assets market, but its long-term effects remain to be seen. Investors should fully consider the potential risks and rewards when making decisions.