Senator Elizabeth Warren of Massachusetts, one of the most vocal advocates for consumer financial protections, has recently raised the alarm over the Trump administration\u2019s push to allow cryptocurrency investments into ordinary workers\u2019 retirement plans.<\/p>\n
President Donald Trump signed an executive order in 2025 opening the door to so-called \u201calternative assets\u201d to be part of retirement accounts such as 401(k) plans (1). However, the notorious volatility of these digital assets coupled with Trump\u2019s own involvement in the crypto industry seems to have caught Senator Warren\u2019s attention.<\/p>\n
In a Jan. 12 letter to Securities and Exchange Commission (SEC) Chair Paul Atkins, she demanded a detailed account of how the agency intends to mitigate risks if digital assets such as Bitcoin are allowed into 401(k)s (2).<\/p>\n
As of mid-February 2026, there\u2019s no substantive public response from the SEC to her specific questions, despite a Jan. 27 deadline Warren set for a reply.<\/p>\n
The SEC\u2019s lack of a clear public response to Warren leaves a policy vacuum that could have real impacts on millions of Americans. Here\u2019s how you can lose huge sums of money relatively quickly in an investment vehicle designed for reliable returns \u2014 not explosive volatility.<\/p>\n
At its core, the 401(k) plan is designed for long-term retirement savings. Roughly 70 million American workers rely on these plans for their nest eggs, according to Fidelity (3).<\/p>\n
In contrast, the extreme volatility of cryptocurrencies make them better suited to traders and speculators than retirement savers. Despite its comparisons to \u201cdigital gold,\u201d the CME Group found that the price of Bitcoin moves up and down somewhat alongside the movements of the stock market, which means it is far more volatile than a reserve currency or hard asset (4).<\/p>\n
Cryptocurrency has also underperformed stocks in recent years. As of Feb. 11, 2026, Bitcoin and Ethereum, the two leading cryptocurrencies, have underperformed the Nasdaq-100 and S&P 500 by wide margins over the last five years \u2014 and that\u2019s not even including the dividends you earn from stocks. Put simply, you would have made more money by buying a simple and cheap index fund in 2021.<\/p>\n
Story Continues <\/p>\n
Unlike index funds, crypto funds are also expensive. Crypto-related exchange traded funds (ETFs) can have expense ratios as high as 2.67%, according to ETF Database (5).<\/p>\n
In her letter to the SEC, Senator Warren highlights how this volatility and these high fees could lead to bad outcomes for many vulnerable savers.<\/p>\n
“There is no reason to expect that inviting plans to offer these alternative investments will lead to better outcomes overall for participants,\u201d she wrote.<\/p>\n
Warren also raised concerns about Trump\u2019s deep involvement in the crypto industry and how that could weigh on the administration\u2019s ability to regulate these assets.<\/p>\n
\u201cPresident Trump\u2019s sudden embrace of the crypto industry appears to be driven by his own conflicts of interest and ability to profit from crypto free-for-alls,\u201d Warren wrote. \u201cSince the beginning of his second term, President Trump and his family have amassed over $1.2 billion in financial gains from crypto.\u201d<\/p>\n
With these factors in mind, the letter requests the SEC to clarify how it would ensure fair valuation, prevent market manipulation and educate investors as crypto exposure expands through defined-contribution plans, but the agency is yet to respond even as Warren\u2019s deadline has come and gone.<\/p>\n
To sum up, cryptocurrencies are volatile, provide disappointing returns compared to tried-and-true alternatives like traditional index funds, and are operating in a lax regulatory environment that could heighten risks further.<\/p>\n
Read More: The average net worth of Americans is a surprising $620,654. But it almost means nothing. Here\u2019s the number that counts (and how to make it skyrocket)<\/a><\/p>\n If you share some of Warren\u2019s concerns about cryptocurrencies, the first step could be to reach out to your employer to get a clearer picture of your 401(k) choices. Speak to your manager, the finance team or human resources to see if they can give you more color about your retirement plan options.<\/p>\n Plan documents detail available investments, expense ratios, and administrative fees \u2014 information many workers overlook.<\/p>\n The next step could be to consult a professional financial advisor or planner to figure out if cryptocurrencies and other alternative assets match your risk appetite, long-term goals and investment style. If these niche assets are not a great fit, you can take steps to ringfence your investments.<\/p>\n Join 200,000+ readers and get Moneywise\u2019s best stories and exclusive interviews first \u2014 clear insights curated and delivered weekly. Subscribe now.<\/a><\/p>\n We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines<\/a>.<\/p>\n WhiteHouse.gov (1<\/a>); U.S. Senate Committee on Banking, Housing, and Urban Affairs (2<\/a>); Fidelity (3<\/a>); CME Group (4<\/a>); ETF Database (5<\/a>)<\/p>\n This article provides information only and should not be construed as advice. It is provided without warranty of any kind.<\/p>\n","protected":false},"excerpt":{"rendered":"Senator Elizabeth Warren of Massachusetts, one of the most vocal advocates for consumer financial protections, has recently raised…\n","protected":false},"author":2,"featured_media":472554,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[54070,45,49,48,111414,4190,92575,1376,9613,133,131,132,12521,1464,192128],"class_list":{"0":"post-472553","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-alternative-assets","9":"tag-business","10":"tag-ca","11":"tag-canada","12":"tag-crypto-industry","13":"tag-dave-ramsey","14":"tag-digital-assets","15":"tag-donald-trump","16":"tag-elizabeth-warren","17":"tag-finance","18":"tag-personal-finance","19":"tag-personalfinance","20":"tag-retirement-plans","21":"tag-sec","22":"tag-senator-warren"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/472553","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=472553"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/472553\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/472554"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=472553"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=472553"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=472553"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}