In May, the DOL issued a statement in which it rescinded guidance given in 2022. Under the Biden administration, the department directed fiduciaries to use extreme care before adding cryptocurrency to their investment offerings. Now the department says it will neither approve nor disapprove of their inclusion as an option.
The Biden administrations department of labor made a choice to put their thumb on the scale, DOL Secretary Lori Chavez-DeRemer said at the time. Were rolling back this overreach and making it clear that investment decisions should be made by fiduciaries, not D.C. bureaucrats.
AARPs report cited 2024 data from the Government Accountability Office (GAO) suggesting that crypto assets represent a small portion of the 401(k) market. The GAO identified 69 crypto options available to 401(k) participants. This number could grow after the Securities and Exchange Commission approved the use of Bitcoin exchange-traded funds (ETFs), allowing for easier buying and selling on major investment platforms.
You probably will see some retirement plans start to offer crypto, Amy Arnott, a portfolio strategist for Morningstar, told AARP. But there might be some reluctance, given fiduciary considerations, about whether it is prudent to offer something with such volatility within retirement plans.
In May 2025, Arizona Gov. Katie Hobbs vetoed legislation that wouldve allowed the state treasurer and retirement system for public personnel to invest up to 10% of their holdings in cryptocurrencies. Hobbs said at the time that Arizonans retirement funds are not the place for the state to try untested investments like virtual currency.
Crypto assets have received more attention recently when it comes to their use in mortgages.
In June, the Federal Housing Finance Agency (FHFA) instructed Fannie Mae and Freddie Mac to begin preparing for the use of crypto in the underwriting of forward mortgages. The order explicitly includes only cryptocurrency assets that can be evidenced and stored on a U.S.-regulated centralized exchange.
Last month, U.S. Sen. Cynthia Loomis of Wyoming introduced the 21st Century Mortgage Act. The bill would require Fannie and Freddie to consider unconverted digital assets in their underwriting processes.
There are several potential advantages and disadvantages for investors when considering these products, AARP reported.
First, these assets are relatively easy to add to portfolios. For example, a Blackrock ETF thats focused on Bitcoin reportedly has some $86 billion in assets and half this amount originates from individual investors through brokerage platforms.
AARP also notes the recent growth in Bitcoins value as it skyrocketed by triple-digit percentages in each of the past two years. That compared favorably to the roughly 25% growth in the S&P 500. The question is whether that growth is sustainable.
Portfolio diversification is another reason to consider crypto as the more you spread your risk among different asset classes, the less vulnerable you are to shocks in any one sector, AARP pointed out. Gold has served a similar function in past to help investors weather volatility in stocks and bonds.
Conversely, cryptocurrency has also some possible negative aspects to consider. Its more volatile than other assets and may not sit well with more conservative investors. And for older Americans who are at or near retirement age, that could spell trouble if theyre looking to tap into their savings soon.
Crypto is more for younger investors who might have several decades until retirement, and are willing to hold on through large drawdowns, Arnott argued. & Only consider it if you have a long horizon ahead.
Crypto assets also have fewer regulatory guardrails to keep scams and poorly managed platforms in check. Congress recently passed the GENIUS Act to increase federal oversight of stablecoins crypto products that are tied to real assets like the U.S. dollar. Democrats were vocal in their opposition, arguing that it increases the potential for widespread corruption and fraud.
