US President Donald Trump has signed an executive order paving the way for Americans to add alternative assets such as private equity, cryptocurrencies and real estate into 401(k) retirement saving plans.
The executive order directs the US Secretary of Labor to review fiduciary guidance on private market investments in 401(k) and other defined contribution plans.
Says the executive order: "My Administration will relieve the regulatory burdens and litigation risk that impede American workers’ retirement accounts from achieving the competitive returns and asset diversification necessary to secure a dignified, comfortable retirement."
The order a boon for private asset managers, who have pushed for greater adoption of alternative assets in defined contribution plans.
Meanwhile, Bitcoin's price jumped around two per cent on the news that the sector is likely to gain access to a huge multi-trillion dollar pool of money.
However, some experts have warned that the move could could put Americans' savings at risk given the volatile nature of crypto prices.
“Opening up the $9tn 401(k) industry to alternative assets overall is reasonable, but if these assets and sectors are highly speculative and underregulated, it could be a big mistake,” Anil Khurana, executive director, Georgetown University’s Baratta Center for Global Business, told the Guardian.