Bitcoin surged close to $122,000 and ether reached its highest level since December 2021 on Sunday night, driven by renewed institutional interest and U.S. President Donald Trump’s executive order directing regulators to explore allowing cryptocurrencies and other alternative assets in 401(k) retirement plans. As of 11:25 p.m. Eastern Time, bitcoin was trading at $121,852, up 3.33% over the previous 24 hours, while ether gained 1.25% to reach $4,300.
Analysts attributed the rally to a combination of policy developments, spot exchange-traded fund inflows, and corporate treasury acquisitions. The executive order, signed Thursday, instructs the Department of Labor to review its guidance to plan sponsors on including cryptocurrencies, private equity, and other alternative assets in retirement portfolios. Advocates argue that this could broaden diversification for millions of Americans, while critics warn it could expose savers to complex, illiquid, and high-fee investments that may be unsuitable for inexperienced investors.
Industry observers note that although private equity and crypto are technically permitted in retirement accounts, they remain rare, and employer adoption would depend on fiduciary risk assessments. Market analysts see the policy shift as a potential catalyst for fresh demand. SignalPlus Head of Insights Augustine Fan said opening retirement accounts to digital assets could generate significant buying pressure. Bitcoin spot ETFs recorded $253 million in net inflows this week, while spot ether ETFs drew $461 million, surpassing bitcoin ETF inflows.
Bitcoin and ether surge on Trump’s 401k alternative asset plan
This surge in ether demand, according to BTC Markets analyst Rachael Lucas, has fueled short liquidations and brought Ethereum co-founder Vitalik Buterin back into the billionaire ranks. Ether remains about 11% below its all-time high of $4,878. Corporate treasury purchases have also supported prices. Presto Research analyst Min Jung highlighted SharpLink Gaming’s acquisition of 52,809 ether over the weekend as evidence of growing institutional involvement. Jung noted that such activity may continue to influence price action, though upcoming macroeconomic data could shift sentiment.
The July Consumer Price Index is due Tuesday, followed by the Producer Price Index on Thursday, and the Federal Reserve has indicated that rate cut decisions will hinge on these figures. Financial professionals remain divided on the implications of Trump’s order. Supporters, including trade organizations representing investment banks and asset managers, view expanded access to private markets as a way to democratize investment opportunities. However, several advisors caution that private assets typically involve higher fees, limited liquidity, and less transparency than public securities.
Advisors warn inexperienced investors face higher 401k risks
Some warn that without strict limits and investor education, such exposure could lead to significant losses for retirement savers. Past Labor Department guidance has allowed private equity within 401(k) target-date funds, but uptake has been slow due to fiduciary obligations and legal liability concerns. Experts suggest that even with updated federal guidance, adoption of crypto and other alternatives will likely be gradual, possibly taking three to five years to gain significant traction. In the meantime, market participants expect policy developments and institutional flows to remain central to cryptocurrency price momentum in the months ahead. – By Content Syndication Services.