Allowing crypto investments in retirement accounts could attract hundreds of billions of dollars over the next two years, contributing to the recent surge in major cryptocurrencies and pushing the market toward $4 trillion.

This policy shift could lead to bullish market sentiment, with increased institutional flows into Bitcoin and altcoins, possibly driving prices above $70,000.

The goal of this push is to help Americans achieve more secure and diversified retirement savings by broadening access to alternative assets like cryptocurrencies.

This movement reflects a broader trend of institutional adoption, with some pension funds already increasing crypto holdings, potentially leading to sustained growth and attracting long-term investors.

However, some public pension funds, such as Wisconsin’s Investment Board, have reduced their crypto ETF holdings, indicating mixed approaches among institutional investors.

U.S. lawmakers are urging the SEC to implement an executive order from the Trump administration that would allow 401(k) retirement plans to include Bitcoin and other cryptocurrencies, signaling a potential shift toward regulatory support for institutional crypto investments.

Lawmakers are calling on the SEC to work with the Department of Labor to revise regulations, including reviewing legislation related to accredited investors, to facilitate inclusion of these assets in retirement plans.

If retirement funds diversify into cryptocurrencies, increased liquidity in major pairs like BTC/USD and ETH/USD is expected, which could reduce volatility as more stable capital enters the market.

Experts advise investors to carefully consider their risk tolerance before allocating retirement savings to volatile cryptocurrencies, despite the potential for significant gains.

The executive order directs regulators to create guidelines for including alternative assets like digital currencies in retirement portfolios, initially limiting allocations to 5-10% to manage risk.

Currently, the SEC has not published official rulemaking, and the Department of Labor's cautious guidance from 2022 continues to influence the regulatory landscape, making official policy changes pending.

Past regulatory approvals for Bitcoin ETFs have historically triggered substantial price rallies and increased trading volumes, especially around key resistance levels like $60,000 to $65,000.

The SEC, now led by Paul Atkins, is expected to issue guidance on crypto in retirement plans as early as late 2025, marking a significant step toward mainstream acceptance.