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Canada News.Net
2 days ago
- Business
- Canada News.Net
Crypto, private equity eyed for 401(k)s under new Trump directive
NEW YORK CITY, New York: Millions of Americans saving for retirement could one day see private equity and cryptocurrency added to their 401(k) investment options under an executive order signed by President Donald Trump, potentially giving these industries long-coveted access to trillions of dollars in retirement funds. The order directs the Labor Department and other agencies to redefine what qualifies as an approved asset under the Employee Retirement Income Security Act of 1974 (ERISA), which governs U.S. retirement plans. Currently, most 401(k) accounts are invested in stocks, bonds, cash, and a small share of heavily traded commodities like gold. Employers are legally required to act in the best interests of their employees when offering investment options. There will be no immediate changes. Federal agencies must first draft and finalize new regulations, likely a process of months or longer, before employers can expand available choices. Once implemented, retirement plans could include alternative assets such as private equity, cryptocurrencies, and real estate. The move is a win for the US$5 trillion private equity sector, which has long sought access to 401(k) accounts, and for cryptocurrency firms, many of which supported Trump's 2024 campaign and are seeking mainstream acceptance. Bitcoin rose two percent this week to $116,542, nearly doubling since Trump was elected. Under former President Joe Biden, regulators approached crypto investments in retirement accounts "with extreme care" due to volatility. Cryptocurrencies such as Bitcoin and Ethereum can swing 10 percent in a single day, compared with two percent to three percent for major stock indexes. "It was inevitable that bitcoin would make its way into American 401(k)s," said Cory Klippsten, CEO of Swan Bitcoin. "As fiduciaries realize bitcoin's risk-adjusted upside over the long term, we'll see growing allocations, especially from younger, tech-savvy workers." For private equity firms, 401(k) access would unlock a vast pool of new capital. Blackstone CEO Steve Schwarzman has described this as a "dream" for the industry since at least 2017. Private equity has historically returned about 13 percent annually since 1990, versus 10.6 percent for the S&P 500, but investments are illiquid, often tied up for years until underlying companies are sold. Bryan Corbett, president and CEO of the Managed Funds Association, said the industry looks forward to creating "a thoughtful framework" with the Trump administration to expand retirement options "with appropriate investor guardrails." Even after new rules are finalized, it could take years before private equity and crypto appear widely in retirement plans. Major firms like Fidelity, Vanguard, and T. Rowe Price would need to design compliant products, and employers may be slow to change plan menus. Vanguard said it has not committed to offering private assets in defined contribution plans but will continue to educate investors "to ensure a clear understanding of the opportunities and risks."
CBS News
4 days ago
- Business
- CBS News
Trump opens the door for crypto and private equity in your 401(k) retirement plan
President Trump on Thursday signed an executive order that could allow millions of Americans saving for retirement through 401(k) accounts invest in higher-risk private equity and cryptocurrency assets. The executive order doesn't immediately change how people will invest for retirement through their employer-sponsored accounts, as federal agencies would need to rewrite regulations to allow expanded investment choices. That's a process that experts say could take months, or longer, to complete. But once done, employers could offer a broader array of mutual funds and investments to workers, according to the White House. New plans could invest in alternative assets, particularly private equity, cryptocurrencies and real estate. The move comes as the 401(k) has become the primary vehicle for American workers to save for retirement, with most employers offering a menu of investment choices among major asset classes, such as stock-based mutual funds. The $5 trillion private equity industry, which makes investments into private businesses rather than publicly traded stocks, has for decades wanted to compete for a role in retirement plans. At the same time, the cryptocurrency industry, whose executives strongly supported Trump's 2024 campaign, has aimed for more mainstream acceptance among Americans. "It was inevitable that bitcoin would make its way into American 401(k)'s," said Cory Klippsten, the CEO of Swan Bitcoin. "As fiduciaries realize bitcoin's risk-adjusted upside over the long term, we'll see growing allocations, especially from younger, tech-savvy workers who want hard money, not melting ice cubes." The EO could give private equity and crypto firms long-sought access to a pool of funds worth trillions. Investment companies applauded Mr. Trump's executive order, with TIAA, which manages the retirement assets of teachers, professors and other academics, and investing giant BlackRock saying they support the measure for providing a broader number of investment strategies to workers. "We believe end investors can benefit from the advantages that private investments can offer when embedded within professionally managed vehicles like target date funds or through guaranteed annuity products," TIAA said in a statement emailed to CBS MoneyWatch. The president's order directs the Labor Department and other agencies to redefine what would be considered a qualified asset under 401(k) retirement rules. Americans' retirement plans are governed by a law known as the Employee Retirement Income Security Act of 1974, better known as ERISA. Employers are required by law to offer retirement options that are in the best interest of their employees, not Wall Street. Most retirement plans for Americans are made up of stock and bond investments, and to a much lesser extent, cash and heavily traded commodities such as gold. Even after the regulations are written, it will take time for the major retirement plan companies such as Fidelity, Vanguard, T. Rowe Price and others, to develop appropriate funds for employers to use. Employers are not likely to revise their retirement plan options quickly as well, so it may take several years before crypto and private equity investments are mainstream in an individual's retirement plan. The price of bitcoin was up 2% on Thursday to $116,542 and has nearly doubled since Trump was elected. Under Democratic President Joe Biden, federal regulators were to treat cryptocurrency investments with "extreme care" because of the extreme volatility of crypto. It is not uncommon for bitcoin, ethereum and other big cryptocurrencies to move up or down 10% in a single day, whereas a 2% or 3% single-day move in the stock market would be considered historic. For cryptocurrency companies, which donated millions to Trump's campaign as well as his inauguration, one goal was to get their industry qualified under ERISA. Coinbase, one of the largest crypto companies in the United States, was also a major donor toward Trump's military parade in Washington this summer. Under Trump, the Securities and Exchange Commission dropped its lawsuit against Coinbase, where the Biden administration said crypto should be treated as a security. Crypto is particularly popular among young Americans. While volatile, bitcoin has generally moved upward since it was created by an anonymous programmer nearly 20 years ago. Private equity firms rely heavily on high-net-worth individuals and state and private pension plans, which have extremely long investment timelines. But having access to Americans' retirement assets would open up a deep pool of cash. Blackstone CEO Steve Schwarzman has told investors going back to at least 2017 that it was a "dream" of his and the industry to be able to draw upon these retirement assets. Previous administrations, Republican and Democrat alike, had agreed that private equity investments, which can be riskier, more expensive and less liquid than traditional stock and bond market mutual funds, should not be included in 401(k) plans.
Yahoo
31-07-2025
- Business
- Yahoo
Ray Dalio warns investors to allocate 15% of their portfolio to gold and crypto because of skyrocketing U.S. government debt
Ray Dalio wants investors to reassess their portfolio and consider allocating 15% of their investments to Bitcoin and gold as the federal government continues to increase its debt. Dalio warned that the 'economic heart attack' likely to be caused by the rising debt hasn't been priced into currency and bond markets. Famed hedge fund manager Ray Dalio wants investors to look beyond the traditional 60/40 portfolio made up of 60% stocks and 40% bonds. Instead, the billionaire founder of Bridgwater Associates is urging investors to allocate 15% of their portfolio to gold and crypto. While he didn't reveal how he allocates his own portfolio, this percentage represented 'the best return-to-risk ratio,' he said on The Master Investor Podcast with Wilfred Frost. Dalio noted he owns both gold and crypto, but with a caveat, he owns some Bitcoin but not much. 'I'm strongly preferring gold to Bitcoin, but that's up to you,' he said. The larger issue is the devaluation of money, and gold has provided a hedge against this issue throughout history. Bitcoin, in recent years, has also played a similar role as a store of value, and 'it's being perceived by many as an alternative money,' he added. Still, Dalio said he also doesn't want investors to overload on gold, instead saying, 'I want them to diversify well.' Dalio declined to Fortune comment through a spokesperson. Both Bitcoin and gold have been on a tear in 2025, with both assets up about 25% year-to-date. Due to further adoption by companies and nations, John Haar, the managing director of Bitcoin-focused financial services company Swan Bitcoin, sees the price of the cryptocurrency rising above $200,000 per coin by the end of 2025. On stocks, Dalio said the recent hype over AI has made Magnificent Seven stocks like Alphabet, Amazon, and Meta relatively expensive, despite the grand promises of the technology. 'The Magnificent 7 have become rather expensive relative to what even optimists would say are the present value of the future cash flows,' he said. Dalio has warned previously about buying into overvalued stocks even when a company looks great. 'A great company that gets expensive is much worse than a bad company that's really cheap, so you have to look at pricing' he told entrepreneur David Freidberg on the All-In Podcast earlier this year. The state of the U.S. economy and the ballooning federal debt have been favorite topics of Dalio's for years. He previously compared escalating debt payments to 'plaque in the arteries,' and said on the podcast with Frost that the 'economic heart attack' which could come about because of increasing debt has not been priced into either the bond or currency markets. Dalio's warning about bonds goes hand-in-hand with his skepticism about how the government is handling its debt, said Stephan Shipe, a finance professor at Wake Forest University and founder of financial advisory firm Scholar Financial Advising. 'If there's a lack of faith in the government's ability to manage the deficit and repay debt, you're likely to see interest rates rise to compensate for that higher risk. That pushes down the value of existing bonds, which makes them less of a safe haven than they've been in the past,' Shipe said. The trend of escalating interest payments on the federal debt continues; the interest payments could cost the government $13.8 trillion over the next 10 years, according to the Congressional Budget Office. This story was originally featured on
CNBC
09-07-2025
- Business
- CNBC
XRP rises after Ripple selects BNY Mellon as custodian of firm's new stablecoin: CNBC Crypto World
On today's episode of CNBC Crypto World, Ripple selects Bank of New York Mellon as the primary custodian for the firm's U.S. dollar-pegged stablecoin reserves. Plus, Swan Bitcoin CIO Ben Werkman explains why bitcoin is quickly becoming a more attractive treasury asset for companies.
Yahoo
09-07-2025
- Business
- Yahoo
Chip company's stock jumps 43% after aggressive new strategy
Chip company's stock jumps 43% after aggressive new strategy originally appeared on TheStreet. Sequans Communications, a global leader in 5G and 4G internet-of-things (IOT), has successfully implemented a Bitcoin-focused treasury strategy, attracting $384 million through a combination of equity and debt offerings. Backing the move are more than 40 institutional investors, representing a significant turning point for the company in becoming another corporate name to join the list of companies and corporations embracing Bitcoin as a reserve asset. CEO Georges Karam confirmed the company plans to start purchasing Bitcoin right away, noting that Bitcoin's scarcity and lack of a centralized authority could help Sequans's financial resiliency and long-term value to its shareholders. He also stated that the company will continue to buy more Bitcoin, utilizing cash flows from its core business as well as new capital were over 139 million American Depository Shares (ADSs) and secured convertible debentures maturing in 2028 sold in this fundraising, plus common warrants at $1.40 per ADS, which could yield an additional $57.6 million if exercised in full. The proceeds will be used to purchase Bitcoin and meet governance requirements as specified in the offering. Sequans is partnering with Swan Bitcoin, a prominent institutional Bitcoin service, to provide execution and custody security. This is similar to MicroStrategy and Japan's Metaplanet using Bitcoin as a hedge against increasing sovereign debt and inflation. After the announcement, Sequans' stock (SQNS) climbed over 43% in 24 hours, peaking at $1.81 pre-market. By contrast, Bitcoin traded around $109,100.95, up 1.13% according to Kraken's price feeds. However, SQNS has seen a 43.75% decline in the year-to-date period. Chip company's stock jumps 43% after aggressive new strategy first appeared on TheStreet on Jul 8, 2025 This story was originally reported by TheStreet on Jul 8, 2025, where it first appeared. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
