Can Bitcoin Really Be Too Risky for 401(k)s? What the Data Actually Shows

The Bitcoin Price Predictions 2025 debate just got more serious. With Trump’s executive order opening doors for cryptocurrencies in retirement accounts, the clash between crypto advocates and regulators has intensified—and the numbers tell a different story than critics suggest.

The Volatility Argument That Doesn’t Hold Up

Senator Elizabeth Warren recently pushed the SEC to investigate whether Bitcoin’s price swings make it unsuitable for 401(k) portfolios. Her concern centers on two points: extreme volatility and hidden fees that could erode retirement savings.

Bitwise’s Chief Investment Officer Matt Hougan has a different take on this narrative. He points out a critical flaw in the volatility argument: comparing Bitcoin to established tech stocks reveals an uncomfortable truth for critics. Nvidia, America’s semiconductor powerhouse, experienced a 120% price movement within a six-month window during 2025. Bitcoin, by comparison, showed a 65% variance between its April lows and October highs during the same period—a notably smaller swing.

“If we’re genuinely concerned about price fluctuations in retirement accounts, we need to apply the same standard across all assets,” Hougan argued during a recent financial conference. His point challenges the selective criticism that targets cryptocurrency while ignoring similar volatility patterns in traditional equities.

From Resistance to Neutrality: How Policy Is Shifting

The Labor Department took a significant step in May when its Employee Benefits Security Administration reversed its previous stance against cryptocurrencies in retirement plans. The shift from active discouragement to official neutrality signals a policy realignment that could reshape how Americans build retirement wealth.

This wasn’t just bureaucratic reshuffling. Trump’s directive tasked regulators with reconsidering outdated restrictions on alternative assets, fundamentally questioning whether 401(k) rules written for the 20th century still make sense in a digital asset era.

Current Market Context: Bitcoin Price Predictions 2025 and Beyond

With Bitcoin now trading around $96.60K, the timing of this debate feels particularly relevant. As the market matures and institutional adoption accelerates, the conversation has shifted from “should crypto be allowed?” to “what safeguards do we actually need?”

Investment firms like Vanguard previously voiced blanket objections to Bitcoin in retirement accounts. Yet those concerns look increasingly disconnected from actual market behavior. The question isn’t whether volatility exists—it does. The question is whether that volatility differs meaningfully from sectors already permitted in retirement portfolios.

What Happens Next

Hougan predicts that cryptocurrency will eventually achieve normalization within retirement planning frameworks. “This transition is inevitable,” he stated. “We’re moving toward a financial system where digital assets sit alongside traditional investments as standard portfolio components.”

Warren’s request for SEC clarification by late January suggests the regulatory process is entering a critical phase. Whether the agency implements new safeguards, additional disclosures, or simply formalizes the neutral stance remains to be seen.

One thing appears certain: the era of blanket Bitcoin bans in retirement accounts is ending, even as the details of how to integrate them remain actively contested.