Trump’s 401(k) Crypto Move Could Unlock $600B in Flows

Key Points

• Trump’s 401(k) Crypto Move Could Unlock $600B in Flows
•  Estimated $50B in biweekly inflows into crypto
  
•  Even 1% allocation equals $120B in demand
  
• Critics warn of high risk and fiduciary friction

Donald Trump’s latest executive order might just reshape crypto investing, this time through America’s $12 trillion 401(k) retirement market.

Crypto in 401ks is WAY WAY BIGGER news than the ETFs

In the US, roughly 100 million Americans have a retirement investment vehicle known as a 401(k). Every 2 weeks, a portion of their paychecks are routed directly into purchasing a mixture of stocks and bonds. On autopilot. No… https://t.co/XRWf1NKSSw

— Tom Dunleavy (@dunleavy89) August 7, 2025

While spot Bitcoin ETFs have dominated headlines, this policy change could be far more influential. The executive order, if implemented effectively, would allow workers to add crypto to their retirement plans, potentially generating up to $600 billion in automatic, recurring demand if even a 5% allocation is applied.

And the inflows wouldn’t rely on investor mood swings or market timing like ETFs—they’d come from payroll deductions, deposited regularly and automatically, every two weeks.

“Crypto in 401(k)s is WAY WAY BIGGER news than the ETFs,” said Tom Dunleavy, head of venture at Varys Capital.

Here’s why this shift could be the true catalyst for long-term crypto adoption.

401(k) Crypto Could Outperform Bitcoin ETFs in Scale

Wall Street has celebrated the arrival of Bitcoin ETFs, especially with BlackRock’s IBIT recording historic inflows. But these rely on investor choices; they’re optional.

401(k)s work very differently. These retirement accounts are designed for automatic contributions, meaning millions of Americans invest on a schedule without needing to make active decisions each time.

Here’s why that matters:

• The US 401(k) system holds about $12 trillion in total assets.

• $50 billion flows into these accounts every two weeks via payroll.

• A mere 1% allocation to crypto could result in $120 billion in continuous inflows.

• A 5% allocation could mean up to $600 billion going into digital assets.

“This is a HUGE driver of the equity market run…401(k)s just keep buying,” Dunleavy emphasized.

Many of these contributions go into target-date funds, which automatically rebalance portfolios as investors age. Once crypto is added to those structures, it could quietly but powerfully become part of most American portfolios.

This would rival or even surpass the momentum seen from ETFs, especially when compared to other headline-making events like the XRP lawsuit dismissal, which also had a significant impact on market sentiment.

Glassnode co-founder Negentropic called this the “watershed moment” crypto has been waiting for, arguing it may eclipse even the ETF narrative in terms of long-term impact.

People don’t realize yet how big todays news has been for crypto… this will be seen as the watershed moment for mainstream adoption, much more than the ETF.

— 𝗡𝗲𝗴𝗲𝗻𝘁𝗿𝗼𝗽𝗶𝗰 (@Negentropic_) August 7, 2025

Infrastructure Is Evolving for a Retirement-Ready Crypto Market

Still, not everyone is convinced. Critics say putting volatile crypto assets into retirement savings is risky and possibly premature.

Peter Schiff, a well-known crypto skeptic, warned that this could gamble away Americans’ futures, especially if the market swings sharply.

Most Americans have saved far less than needed to have any hope of retirement. By allowing Americans to gamble what little retirement savings they have in their 401(k)s on Bitcoin and other cryptos, Trump just made this problem much worse!

— Peter Schiff (@PeterSchiff) August 7, 2025

And it’s not just philosophical. There are practical roadblocks, too. Tens of thousands of retirement plan committees, each with legal liability and fiduciary duty, must individually approve crypto as an asset class.

But crypto-native firms are stepping up to meet that challenge.

Thomas Chen, CEO of Function, said Trump’s new directive validates a trend already underway: the institutionalization of crypto via compliant infrastructure.

“Fiduciaries aren’t interested in holding idle crypto. They want transparent, yield-generating, governed assets,” said Chen.

I get it. I was a pension consultant for 5 years. It will take time but its going to happen much, much quicker than you think.

I’ll take the under on an allocation to crypto being in 50%+ plans within two years.

— Tom Dunleavy (@dunleavy89) August 7, 2025

His firm is working on tech that combines MPC wallets, real-time auditing, and tokenized yield instruments to make crypto suitable for retirement-grade portfolios.

This evolution of compliant infrastructure echoes broader shifts in the market, such as how Ripple’s potential IPO is reshaping expectations around crypto’s integration into traditional finance.

Industry experts predict that over 50% of 401(k) plans could offer crypto options within two years, especially once fiduciary protections and clarity are built into the system.

A Structural Shift That Could Redefine Crypto Demand

Unlike ETFs, which rely on voluntary investor activity, 401(k) contributions are consistent and automated. That changes the game.

In a typical 401(k), investors rarely adjust allocations more than once a year. That means money keeps flowing in, regardless of market dips or headlines.

This kind of discipline and consistency is exactly what crypto markets need. So far, the space has been shaped by volatile cycles and sudden sell-offs. Adding crypto to retirement plans could add long-term stability and reduce volatility, much like how traditional markets have benefited from 401(k) participation.

Imagine the impact of dollar-cost averaging into Bitcoin and Ethereum every payday, millions of investors doing it, without having to think about it. That’s a game-changer.

It also complements growing concerns over macroeconomic risks, like those outlined in the Fed’s recent rate cut warning to crypto investors. In uncertain times, consistent demand matters more than ever.

At the same time, new discussions about liquidity challenges between Bitcoin and Ripple show that market depth and consistency are key to survival during turbulent times. Autopilot demand from retirement accounts may become a key stabilizer.

As the policy landscape evolves and firms race to deliver compliant products, the integration of crypto into 401(k)s could become one of the most underestimated but powerful forces in digital asset history.

And while some may dismiss it as another political move, the truth is—it might be just what crypto needs to go fully mainstream.

Even as smaller tokens face delisting issues like Memefi on Binance, the 401(k) shift points to a future where the big players like Bitcoin and Ethereum are seen as essential, not optional.