The cryptocurrency market saw gains on 7 August following news that bitcoin and other digital assets could soon be included in 401(k) retirement plans in the US.
According to CNBC, President Donald Trump is expected to sign an executive order allowing 401(k) accounts to invest in alternative assets, such as private equity, real estate, and digital assets.
Bitcoin rose by approximately 1%, returning to the US$116,000 level for the first time since 31 July.
Ether climbed nearly 4%, also reaching a one-week high.
Shares of crypto-related firms pulled back from earlier highs as the broader stock market rally faded later in the day.
Coinbase and Galaxy Digital were each up by about 1.5%, while Bitmine Immersion, which holds a significant amount of ether, gained nearly 4%.
The inclusion of bitcoin in retirement plans has long been seen as a significant milestone for mainstream crypto adoption.
With a total value of around US$43 trillion, nearly US$9 trillion of which is held in 401(k) plans. the US retirement market presents a substantial pool of capital.
By comparison, the total cryptocurrency market capitalisation currently stands at nearly US$4 trillion.
“That’s a monster pool of capital. What we’re seeing … [is] the aperture of being able to buy crypto being widened and widened, [and] more avenues bringing people into the tent,”
Galaxy Digital CEO Michael Novogratz told CNBC’s “Squawk Box”.
“When it becomes commonplace, when you can do it at the place you’ve already been doing business with, if it’s Fidelity or T. Rowe Price or whoever it is, you just pull more people into this ecosystem,”
he added.
Fidelity became the first retirement plan provider to offer bitcoin exposure in 401(k)s in 2022, though adoption has been limited.
Contributing factors include the previous year’s rate hike-driven bear market, lingering regulatory uncertainty, and general investor caution.
The reported executive order, first covered by Bloomberg, is part of a broader effort by the Trump administration to establish the United States as the “crypto capital of the world.”
In July, President Trump signed the GENIUS Act, stablecoin legislation, into law, marking the country’s first official federal crypto framework.
Featured image credit: Edited by Fintech News America, based on image by Kar881am via Freepik
