Can you hold Bitcoin in a 401(k) plan?
Federal retirement law does not rule it out. The Department of Labor's March 2026 proposed rule states that "ERISA contains no categorical restrictions on investment type," and it names Bitcoin when it describes digital assets. Whether you can actually buy Bitcoin exposure in your 401(k) depends on the options your plan's fiduciaries choose to offer.
The federal position changed in three steps. In May 2025, the Labor Department rescinded its 2022 warning on cryptocurrency in 401(k) plans. In August 2025, Executive Order 14330 listed digital asset investment vehicles among "alternative assets." In March 2026, the Department proposed a safe harbor for fiduciaries selecting investment options, with comments due June 1, 2026.
Key points
In March 2022, the Department of Labor cautioned plan fiduciaries "to exercise extreme care before they consider adding a cryptocurrency option" to a 401(k) plan.
On May 28, 2025, Compliance Assistance Release No. 2025-01 rescinded that guidance and stated that "The standard of 'extreme care' is not found in" ERISA.
Executive Order 14330, signed August 7, 2025, includes "holdings in actively managed investment vehicles that are investing in digital assets" in its definition of alternative assets.
The Department's proposed rule at 91 FR 16088, published March 31, 2026, describes digital assets as including "cryptocurrencies such as Bitcoin and other tokens."
The proposal states that "there is no per se rule respecting the inclusion of actively managed investment vehicles that are investing in digital assets."
Its safe harbor asks fiduciaries to weigh six factors: performance, fees, liquidity, valuation, benchmarking and complexity.
For IRAs, the IRS list of collectibles under IRC Section 408(m) does not mention digital assets.
Who decides whether a 401(k) offers Bitcoin?
The plan's fiduciaries. In a participant-directed 401(k) plan, you choose among a menu of "designated investment alternatives" that the plan's fiduciaries select. You can only pick Bitcoin exposure if the menu includes it.
Those fiduciaries are bound by ERISA's duty of prudence. As quoted in Compliance Assistance Release No. 2025-01, ERISA requires a fiduciary to act "with the care, skill, prudence, and diligence under the circumstances then prevailing."
The Department of Labor's guidance shapes how fiduciaries read that duty. That is why its changing position on cryptocurrency matters for anyone who wants Bitcoin in a retirement plan.
What did the Department of Labor say about cryptocurrency in 401(k)s in 2022?
It urged caution. On March 10, 2022, the Department issued Compliance Assistance Release No. 2022-01. It stated: "The Department cautions plan fiduciaries to exercise extreme care before they consider adding a cryptocurrency option to a 401(k) plan's investment menu."
That page now carries a note: "This release was rescinded by Compliance Assistance Release No. 2025-01."
Why did the Department of Labor rescind its 2022 cryptocurrency guidance?
To return to a neutral position. On May 28, 2025, Compliance Assistance Release No. 2025-01 stated: "This release rescinds Compliance Assistance Release No. 2022-01."
The release took issue with the 2022 wording. It stated: "The standard of 'extreme care' is not found in the Employee Retirement Income Security Act (ERISA)."
It also set out the Department's stance going forward. The Department is "neither endorsing, nor disapproving of, plan fiduciaries who conclude" that including cryptocurrency in a plan's investment menu is appropriate.
Does the 2025 release mean the Labor Department endorses Bitcoin?
No. The release is neutral by its own terms. It removes the "extreme care" standard but leaves the decision to plan fiduciaries, under ERISA's ordinary duty of prudence.
What does Executive Order 14330 say about digital assets?
It puts them on the list of alternative assets. On August 7, 2025, the President signed Executive Order 14330, "Democratizing Access to Alternative Assets for 401(k) Investors."
Section 3(a) defines alternative assets. One of the listed categories is "holdings in actively managed investment vehicles that are investing in digital assets."
The order gave the Labor Department two tasks, each within 180 days:
Under Section 3(b), "the Secretary of Labor (Secretary) shall reexamine" the Department's guidance on a fiduciary's duties under ERISA.
Under Section 3(c), the Secretary is to "seek to clarify the Department of Labor's position on alternative assets," and to propose rules or guidance, which may include safe harbors.
Section 3(e) also directs the SEC, in consultation with the Secretary, to "consider ways to facilitate access to investments in alternative assets."
Does the executive order cover Bitcoin held directly?
The order's wording is narrower than that. Its category is "holdings in actively managed investment vehicles that are investing in digital assets." It does not, in that definition, refer to a plan holding Bitcoin directly.
What is the Department of Labor's 2026 proposed rule?
A safe harbor for choosing 401(k) investment options. On March 30, 2026, the Department announced a proposed rule to carry out the executive order. It was published at 91 FR 16088 on March 31, 2026, under the title "Fiduciary Duties in Selecting Designated Investment Alternatives" (RIN 1210-AC38).
Its summary states: "This document contains a proposed regulation that clarifies, and provides a safe harbor for, a fiduciary's duty of prudence." The notice states that "Comments are due on or before June 1, 2026."
A proposed rule is not binding. It sets out what the Department intends to adopt in a final rule.
Does the proposed rule mention Bitcoin?
Yes, by name. Discussing the executive order's categories, the proposal states that "Digital assets are a new form of investing" and that the category includes "cryptocurrencies such as Bitcoin and other tokens."
In a footnote, it adds that "there is no per se rule respecting the inclusion of actively managed investment vehicles that are investing in digital assets." The same footnote notes the Department's "return to its historically neutral position with respect to particular investment types and strategies."
Does ERISA ban any asset class?
No, according to the proposal. It states that "ERISA contains no categorical restrictions on investment type" and that ERISA's prudence standard "is plainly neutral to types or classes of designated investment alternatives."
Paragraph (c) of the proposed rule provides that the prudence standard "does not require or restrict any specific type of designated investment alternative." The proposal says its approach "does not favor or disfavor any particular type of investment or investment strategy."
The limit it does set is legality. The proposal states that "a plan fiduciary is prohibited from selecting a designated investment alternative that is otherwise illegal," with an example involving sanctioned entities.
What would fiduciaries have to consider under the safe harbor?
Six factors. The proposed safe harbor is process-based. A fiduciary selecting an investment option would weigh:
performance
fees
liquidity
valuation
benchmarking
complexity
The proposal applies these factors to every designated investment alternative. It states that asset allocation funds holding alternative assets are subject to the same requirements as any other investment.
Can you hold Bitcoin in an IRA?
IRS rules do not list Bitcoin as a collectible. One of the tax rules for individually directed accounts covers collectibles. The IRS page on collectibles lists them under IRC Section 408(m)(2):
"Any work of art,"
"Any rug or antique,"
"Any metal or gem (with limited exceptions, below),"
"Any stamp or coin (with limited exceptions, below)"
"Any alcoholic beverage, or"
"Any other tangible personal property that the IRS determines is a 'collectible' under IRC Section 408(m)."
Digital assets do not appear on that list. For federal tax purposes, the IRS treats Bitcoin as property: Notice 2014-21 states that "virtual currency is treated as property."
Whether a particular IRA can hold Bitcoin depends on what the IRA's custodian or trustee allows.
What does this mean for a Bitcoin holder saving for retirement?
The sources above lead to a few clear points:
No federal rule cited above bans Bitcoin exposure in a 401(k). The 2026 proposal says ERISA "contains no categorical restrictions on investment type."
The 2022 "extreme care" warning on cryptocurrency was rescinded on May 28, 2025.
Executive Order 14330 treats actively managed vehicles investing in digital assets as alternative assets.
The Labor Department's 2026 proposal names Bitcoin and would give fiduciaries a six-factor safe harbor, but it is a proposal, not a final rule.
Your plan's fiduciaries still decide what goes on the menu.
For IRAs, the IRS collectibles list does not include digital assets, and the IRA's custodian decides what it will hold.
3. Q&A
Can I put Bitcoin in my 401(k)?
Only if your plan offers it. The Labor Department's 2026 proposed rule states that "ERISA contains no categorical restrictions on investment type." But in a participant-directed 401(k), you choose from a menu selected by the plan's fiduciaries, who are bound by ERISA's duty of prudence.
Did the Department of Labor ban cryptocurrency in 401(k) plans?
No. In March 2022, it cautioned fiduciaries to "exercise extreme care" before adding a cryptocurrency option. That was guidance, not a ban. Compliance Assistance Release No. 2025-01 rescinded it on May 28, 2025, and the Department's 2026 proposal says ERISA contains no categorical restrictions on investment type.
What did Compliance Assistance Release 2025-01 say?
It rescinded the 2022 release. Release 2025-01 states that "The standard of 'extreme care' is not found in" ERISA. The Department is "neither endorsing, nor disapproving of," fiduciaries who decide to include cryptocurrency in a plan's investment menu. Those fiduciaries remain bound by ERISA's duty of prudence.
What is Executive Order 14330?
It is the August 7, 2025 order "Democratizing Access to Alternative Assets for 401(k) Investors." It defines alternative assets to include "holdings in actively managed investment vehicles that are investing in digital assets." It directed the Labor Department to reexamine its guidance and clarify its position within 180 days.
Is the Department of Labor's 401(k) alternative assets rule final?
It was published as a proposed rule at 91 FR 16088 on March 31, 2026, with comments due June 1, 2026. A proposed rule does not bind anyone. It would provide a safe harbor for fiduciaries selecting investment options, based on six factors.
Can an IRA hold Bitcoin under IRS rules?
Digital assets are not on the IRS list of collectibles under IRC Section 408(m)(2), which covers items such as art, rugs, antiques, metals, gems, stamps, coins and alcoholic beverages. The IRS treats Bitcoin as property. Whether an IRA holds it depends on its custodian.
This article is general information and not legal advice.
Retirement rules for Bitcoin are a national question, and each country answers it differently. Compare more than 140 countries on The Bitcoin Act's interactive Global Bitcoin Regulatory Map: https://thebitcoinact.xyz/bitcoin-legal-map
The Bitcoin Act covers Bitcoin law and regulation, with news every Tuesday and analysis every Sunday. You can subscribe here: https://thebitcoinact.xyz
