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President Trump has made his next major crypto move. This time, Trump is reportedly planning to sign an executive order allowing crypto and alternative assets in 401(k) accounts.
The move targets the $12.5 trillion retirement market currently dominated by traditional investments.
Crypto company stocks also jumped in premarket trading as investors anticipate expanded access to crypto.
Trump Crypto Order Sparks Stocks Rally In Premarket
MercadoLibre leads the gains with a 1.29% increase to $2,347.08 in early trading. The Latin American e-commerce giant carries a market cap of $117.5 billion with $25.5M in daily volume. Strategy Inc follows with a 2.1% jump to $391.46 on a $112B market valuation.
Robinhood Markets posted strong gains of 4.31% reaching $110.20 per share. The trading platform shows $49.7M in volume with an $88.8B market cap.
Coinbase Global climbed 3.09% to $312.95 with $64.6M in trading activity.
Galaxy Digital Holdings topped all gainers with a 10.44% surge to $41.46. The crypto investment firm trades on $6.1M volume despite its smaller $10.7B market cap.
PayPal Holdings added 0.16% to reach $69.53 with its massive $65.3B valuation.
Marathon Digital Holdings gained 2.77% to $16.33 on $6.2M volume. Circle Internet Group climbed 1.89% to $164.77 with $180.5 million in trading activity.
Even traditional companies with crypto exposure, like GameStop, rose 0.39% to $22.90.
Trump Crypto Order Directs Sweeping Regulatory Review Process
The executive order would direct the Labor Department to review current recommendations on alternative asset investments.
Retirement plans subject to the Employee Retirement Income Security Act of 1974 face new review procedures.
As per the order, the department must clarify government positions on fiduciary responsibilities for fund managers.
Labor Secretary Lori Chavez-DeRemer will coordinate with Treasury Department officials on implementation.
The Securities and Exchange Commission will also receive instructions to facilitate alternative asset access. Other federal regulators will also join the multi-agency effort to determine necessary rule changes.
The SEC is specifically responsible with expanding access to participant-directed retirement plans.
Current legal issues have kept alternative assets out of most employee programs. Corporate plan administrators avoid illiquid and complex products due to liability fears.
This marks the biggest move yet by the Trump administration toward private asset inclusion.
The approach mirrors measures from Trump’s first presidential term when similar guidance was issued. Earlier, the Labor Department guidance allowed private equity in retirement portfolios without violating fiduciary duties.
The Biden administration previously rolled back those Trump-era policies. Now the pendulum swings back toward other investment options for retirement savers.
Multiple federal agencies must work together to create and implement the new regulatory framework.
Massive Retirement Market Opens New Growth Opportunities
The $12.5 trillion held in 401(k) accounts is a major focus of interest for asset managers. Traditional and alternative investment firms view this as the next frontier for business expansion.
As per the latest report from Bloomberg, the number of publicly traded US firms has declined greatly since the 1990s peak.
Opening retirement accounts to private markets would give savers more investment choices. Proponents claim this access provides greater potential upside for retirement planning.
However, retirement plan administrators face potential lawsuit vulnerability from offering complex products.
The legal exposure concerns have historically limited alternative asset inclusion in workplace plans. Corporate companies prefer traditional stock and bond allocations to avoid liability issues.
The latest move connects with Trump’s overall cryptocurrency industry support efforts. Last month’s White House Crypto Week featured industry leaders and policy discussions.
Trump also appointed David Sacks as the first White House AI and crypto czar, which has helped spearhead the recent positive crypto developments in the US.
