Trump-Era Executive Order Paves Way for Billions in Bitcoin 401(k) Investments Amid Supply Crunch

A significant policy shift initiated by former President Donald Trump’s executive order continues to open the door for US retirement savers to invest in Bitcoin through their 401(k) plans. This directive, which eased regulations for alternative assets like cryptocurrencies in retirement accounts, is poised to channel billions of dollars into digital assets via regulated investment products such as spot Bitcoin exchange-traded funds (ETFs).

Estimates suggest the vast $8 trillion (or even $12.5 trillion by some accounts) held in 401(k) accounts represents a massive, largely untapped market for crypto exposure. Even a modest allocation, such as 3% of these assets, could translate to approximately $240 billion in inflows, with a significant portion—around $144 billion—potentially directed into Bitcoin alone.

This anticipated surge in demand comes at a time when Bitcoin’s liquid supply is experiencing a squeeze. Data indicates that Bitcoin reserves on centralized exchanges have fallen to a seven-year low, hovering around 2.5 million BTC. Should retirement plan demand materialize through products like BlackRock’s iShares Bitcoin Trust, issuers will face the challenge of securing the underlying coins. Adding to the supply pressure is a growing trend of aggressive corporate treasury buying, with numerous public and private companies now holding nearly 5% of Bitcoin’s total supply on their balance sheets.

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