Smaller Cryptocurrencies in 401(k) Plans: Labor Department Rule Leaves a Narrow Opening

A Labor Department rule that could widen retirement plan menus has landed on the desk of White House reviewers, who received it on Thursday. The measure, first floated in March, is meant to ease the way for alternative assets such as digital currencies and to give employers and plan managers stronger protection against legal claims. It does not name any specific token and sets no minimum market value. Instead, plan managers are pointed toward six checks: performance, fees, liquidity, valuation, benchmarks and complexity.

Altcoins in Retirement Plans Face an Uphill Climb

Why Bitcoin and Ether Lead the Pack

Teresa Goody Guillén of Bellementis PLLC stressed that smaller coins are not shut out, as plan managers simply have to prove their choices are prudent. Size should not decide the matter, in her view, and new technology should not earn special treatment or special exclusion. Bernardo Brites, CEO of Trace Finance, is blunter. He says most other tokens fail on track record or benchmarks long before market value comes up, and a plan committee must be able to document a reliable daily price from a regulated wrapper.

ETFs Likely Come Before Direct Holdings

Both experts think funds will precede direct crypto ownership, because ETFs fit current custody and recordkeeping systems, while direct holdings raise questions about storage, security and pricing. Brites sees brokerage options in 2027, ETFs at larger employers later that year, and wider availability by 2028.

Legal Risks That Could Slow Crypto Adoption

Brites notes the rule would reduce lawsuit risk but not remove it. A future administration could also undo it, as happened when 2022 guidance was reversed in 2025, and courts now give agencies less deference. White House review can take up to ninety days, followed by publication and a typical sixty day wait before the rule takes effect.