Bitcoin reached a new high near $117K thanks to expectations from Trump's 401(k) retirement plan.

Bitcoin has regained the psychological level of $116,000 and is approaching the peak set in July. This bounce back comes after reports that American President Donald Trump is preparing to sign a large-scale executive order allowing crypto and other alternative assets to be included in 401(k) retirement accounts.

Trump's new decree pushes Bitcoin price closer to 117,000 dollars

At the time of writing, Bitcoin is trading at $116,454, a strong increase from around $114,000 in the Thursday morning trading session.

This increase comes after information that an executive order is about to be issued requiring the U.S. Department of Labor to reassess the guidelines under the Employee Retirement Income Security Act of 1974 (ERISA).

Notably, these guidelines previously often excluded alternative assets such as crypto, real estate, and private equity from the majority of retirement plans for workers.

According to Bloomberg, the decree will instruct the Secretary of Labor to coordinate with the Treasury Department, the U.S. Securities and Exchange Commission (SEC), and other regulatory agencies to review the regulatory changes.

The main goal is to reduce legal barriers to bring cryptocurrency into retirement accounts.

"Extremely optimistic for the crypto market!" – analyst Lark Davis wrote on X.

Davis's comments indicate a positive market reaction to a potential major shift in America's retirement investment policy. With nearly $12.5 trillion being held in 401(k) accounts, the potential capital influx into Bitcoin and other digital assets could be substantial.

BTC price chart 3 hours | Source: TradingviewInstitutional investors such as pension funds and endowments have long approached the private equity market and alternative assets. However, the average American saver has still been excluded until now.

This move is part of Trump's broader cryptocurrency agenda for 2025. The upcoming executive order is expected to revoke Biden's warning about bringing crypto into 401(k) retirement accounts.

However, allowing digital currency to be included in retirement accounts will inevitably face challenges. Legal experts warn that 401(k plan administrators may face lawsuits related to price volatility, as well as high transaction fees for crypto or other illiquid assets.

The difficulties in valuation, custody risks )custody(, the limited understanding of participants, and the continuous changes in regulatory oversight are also existing concerns. Based on this, fiduciary responsibility remains a core issue.

"At the early stage of crypto history as it is now, the Department of Labor has serious concerns about the prudence in the decisions of a fiduciary when allowing participants in the 401)k( plan to invest directly in crypto or products linked to crypto," the Department stated.

The role of Bitcoin is increasingly expanding in the financial system of America

However, supporters argue that the modern financial system has undergone significant changes. The public market has shrunk considerably since the 1990s, while private equity has more than doubled in the decade ending in 2023.

As financial innovation accelerates, Trump's decree could open up new diversification options for individual investors. For the crypto market, this move could inject new liquidity and such optimism has contributed to the bounce back momentum of Bitcoin.

In addition to accessing account 401)k(, Bitcoin is also quietly but significantly expanding its influence in another pillar of American finance – the housing market.

In addition, there is an experimental initiative to provide mortgage loans secured by Bitcoin through a new housing credit institution in America.

This approach allows holders to use BTC as collateral to borrow for home purchases, thereby building a bridge between DeFi and the traditional credit market.

However, this is not simple at all. Recognizing Bitcoin in mortgage home loans comes with legal constraints, including strict loan-to-value ratios, liquidity checks of the collateral, and the requirement to disclose elevated risks.

American regulatory agencies are also cautious about price volatility and partner risks in crypto-backed mortgage lending activities, although they are still cautiously approving innovative initiatives.

Minh Anh