In recent years, many Americans have been dipping their toes into cryptocurrency, making investments that sometimes have paid off – big time.
And the Department of Labor has recognized this, paving the way for employers to add cryptocurrency to 401(k) plans.
Recently, the DOL rescinded requirements in the 2022 Employee Retirement Income Security Act (ERISA) that asked plan sponsors to use extreme care when considering crypto investments. And that change eases up on plan sponsors – as President Donald Trump has stated his support for crypto.
The Securities and Exchange Commission is also updating its rules on cryptocurrency as well.
So, what does this all mean for the average investor?
In a nutshell, the government has taken a neutral stance on cryptocurrency in plan investment menus, meaning they are neither endorsed or disapproved of, so investors can make their own decisions – not the government.
That said, crypto isn’t without risks. Many Wall Street offices support it – especially industry leader Bitcoin – but investors should know crypto is known for wild swings up and down.
You can either strike it rich or lose it all with crypto, which could be OK for those in their younger years – while older investors might want to exercise more caution when considering crypto.
Like any speculative or high-risk investment, it’s best to invest in crypto with money you can afford to lose – and do your research.
Going into crypto investments with your eyes open is best, knowing that it is risky and can move up and down quickly. Know your tolerance for risk.
And know this: If it seems too good to be true – it probably is.
Do you still have questions?
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If you have other questions about retirement plan loans, email us or call 937.308.0758.
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