Bitcoin has blown past $120,000 and, predictably, the buzz is back. Advisors are getting questions. Participants are curious. And yes, some plan sponsors are starting to wonder if it’s time to add crypto to their 401(k) investment lineup.
Let me stop you right there: don’t do it.
The price tag may be seductive, but volatility doesn’t mix well with fiduciary responsibility. Bitcoin isn’t just volatile—it’s an unregulated, speculative asset class with massive price swings and zero fundamentals. Unlike traditional investments, it doesn’t produce income, it isn’t backed by hard assets, and it doesn’t follow the rules of rational markets. That’s not an opinion. That’s the nature of crypto.
As a plan sponsor, your job under ERISA isn’t to chase hype. It’s to act prudently and solely in the best interest of participants. Adding Bitcoin to your 401(k) plan may sound “innovative,” but the risk/reward profile is wildly inappropriate for retirement savings. One bad swing, one negative headline, and participants lose faith, not just in the investment, but in the entire plan.
Regulators aren’t exactly thrilled either. The DOL has already raised serious concerns about crypto in retirement plans. If you think offering Bitcoin gives you an edge, consider how you’ll explain it in a deposition when participants lose their shirt.
Let Bitcoin do what it does, but keep it out of your 401(k). Plan sponsors should focus on delivering long-term, risk-adjusted returns, not headlines.
Leave the crypto speculation to the sidelines. Your fiduciary duty demands better.
