Trump’s crypto 401(k) executive order: Risks of saving for retirement in alternative assets, and who stands to benefit most

President Donald Trump signed an executive order on Thursday that opens the door to allowing alternative assets like cryptocurrencies, private equity, and real estate into 401(k) retirement accounts. Here’s what to know.

What does the executive order say?

The executive order gives the secretary of labor 180 days to review the guidelines that determine the rules for 401(k)s under the Employee Retirement Income Security Act of 1974, known as ERISA. In short, the order calls for the Labor Department to clarify its position on alternative assets. (Under ERISA, employers have a fiduciary responsibility to ensure 401(k) investments are prudent and don’t have onerous fees.)

As Fast Company previously reported, during Trump’s first term, the Department of Labor issued a letter suggesting private equity options could be included in 401(k) and 403(b) defined-contribution plans as part of a target-date fund or another managed fund.

Why is this concerning for 401(k) holders?

Traditionally, private market assets haven’t been included in 401(k)s, for the most part, because their “high fees, lack of transparency, and longer lockup periods make them riskier investments,” according to CNBC. However, they have made their way into pension funds and university endowments.

Why is this a big win for fund managers?

This could give fund managers access to a staggering $12 trillion—yes, trillion—and create a new source of funding besides traditional stocks, bonds, and cash, per The Guardian.

Who stands to benefit the most from the order?

Trump’s executive order is yet another example of this administration’s support of cryptocurrencies and push to loosen the regulations around digital currencies.

Not surprisingly, the prices of some cryptocurrencies are up today on the news. By early afternoon on Friday, the price of Ether (ETH) jumped over 4%. Bitcoin (BTC), which jumped 1% on Thursday on the news, was down slightly, by less than 1%. Meanwhile, stock in Robinhood (HOOD), which offers crypto products, was up 4.5%.