Interest in adding 401(k) to Bitcoin exposure is rising as more employees, especially younger generations, ask about cryptocurrency options in their retirement plans. However, the reality for most mid-sized employers is more nuanced than headlines suggest. Recent regulatory changes, including the Department of Labor's (DOL) May 2025 rescission of its previous crypto guidance, have returned the official stance to neutrality.

"By rescinding the 2022 guidance, the department reaffirms its neutral stance, neither endorsing, nor disapproving of, plan fiduciaries who conclude that the inclusion of cryptocurrency in a plan's investment menu is appropriate." (dol.gov)

This article, part of our 401(k) resources hub at Basic Capital, clarifies what’s actually possible, where misconceptions persist, and how both employees and employers can navigate the options for Bitcoin investment in 401(k) accounts.

The Short Answer

While demand for crypto options in retirement plans is strong, with a 2022 survey cited by ForUsAll finding that 54% of millennials and 56% of Gen Z respondents say crypto is already part of their retirement strategy (forusall.com), directly transferring a 401(k) to Bitcoin is not a standard feature in most employer-sponsored plans. The DOL’s current position signals neutrality but maintains that fiduciaries must still act prudently and consider all relevant circumstances when evaluating any potential investment. Fiduciaries must weigh volatility, valuation challenges, and regulatory factors specific to crypto offerings, as emphasized by the DOL.

Direct transfer of a 401(k) into Bitcoin is rarely available, and any crypto access depends on the plan’s specific design and employer choices.

For a deeper dive into options and compliance, see our detailed 401(k) resources.

Definitions: Rollover vs Transfer

It’s a question nearly every HR professional and plan participant faces: What’s the real difference between a 401(k) rollover and a transfer?

A rollover occurs when you withdraw cash or other assets from one eligible retirement plan and contribute all or part of it, within 60 days, to another eligible plan (IRS).

In contrast, a transfer generally refers to the direct movement of funds between similar accounts (like IRA to IRA), usually handled by the custodians without the account holder taking possession. Transfers most commonly occur between similar accounts, such as IRA-to-IRA, and do not apply between unlike plans.

Understanding the distinction is crucial for both plan sponsors and employees seeking new investment options.

For a more detailed strategy, see our detailed rollover vs transfer guide.

What’s Typically Possible Inside Employer Plans

Employers today see growing interest in Bitcoin investment in 401(k) plans, but actual adoption is still limited. ForUsAll reported that as of November 2022, 50 clients had made crypto available and another 100 clients were expected to join soon, which together would represent roughly 27% to 28% of their base if adopted, while large providers like Fidelity announced they would allow participants to allocate up to 20% of their balance to Bitcoin, though adoption rates by employers remain undisclosed (cnbc.com, congress.gov).

Here’s how crypto exposure might be possible:

• Some plans offer a self-directed brokerage window, where employees can access a broader range of investments—including select cryptocurrencies.

• Certain providers (ForUsAll, Fidelity) have launched features allowing limited Bitcoin allocations, but these require employer approval and typically come with allocation caps to manage risk.

• Most employers remain cautious, given the extra complexity and regulatory scrutiny.

Even as some providers expand crypto access, plan sponsors must rigorously assess compliance and participant education requirements.

The bottom line: Options are expanding, but for most HR/Finance leaders, crypto in a 401(k) is still an emerging, not mainstream, feature.

For more, check out crypto options for employees and HR.

Why “Transfer to Bitcoin” Is Often a Misconception

It’s tempting to believe that employees can simply “move” their 401(k) directly into Bitcoin, but for nearly all plans, this isn’t the case. According to a 2022 industry survey, only about 2% of employers would consider making cryptocurrency available in their plans (time.com).

Even with the DOL’s neutral stance, employers have a legal fiduciary duty to offer prudent investments, so most will wait to see how the market and regulations develop before adding crypto. Cryptocurrency’s volatility only increases the complexity for plan sponsors.

The reality is, direct transfer to Bitcoin isn’t generally an option, and operational hurdles remain significant.

Find a more in-depth look at offering crypto in a 401(k) plan.

If You’re an Employee: How to Ask HR

Too many employees assume that if they want exposure to Bitcoin in their 401(k), it’s just a matter of paperwork. In reality, adding new asset types requires employer approval, regulatory compliance, and system updates.

Still, a 2022 survey cited by ForUsAll found that 54% of millennials and 56% of Gen Z say crypto is already part of their retirement strategy (forusall.com), so it’s a conversation worth having.

If you’re interested, we recommend approaching HR with a clear, well-framed request—emphasizing education and prudent evaluation.

You may also inquire about other alternative investment features permitted by your company's plan, which could include real estate or non-Bitcoin cryptocurrencies.

For a practical approach, use our request template for adding crypto.

If You’re an Employer: How to Evaluate Options

Here’s a prudent, step-by-step approach for HR and Finance leaders considering crypto in 401(k) plans:

1. Gather Input from Employees: Assess employee interest and risk tolerance before exploring new investment options.

2. Consult Advisors and Providers: Work with plan consultants and legal advisors to review regulatory requirements and market offerings.

3. Evaluate Plan Features: Consider self-directed brokerage windows or provider-specific crypto features, but understand the allocation caps and required oversight.

4. Review Fiduciary Duties: The DOL reminds fiduciaries to “consider all relevant facts and circumstances when evaluating any potential investment, noting that these decisions will 'necessarily be context specific.'”

5. Monitor Regulatory Updates: Crypto policy in retirement plans is changing and may affect future compliance.

6. Educate and Communicate: Help participants understand the risks, volatility, and tax implications of crypto investments.

For a comprehensive review, see our policy and provider checklist for employers.

FAQs (High-Level, No Tax Advice)

Q: Are there tax implications for rolling a 401(k) into Bitcoin?
A: The IRS treats cryptocurrencies as property, so transactions are subject to capital gains and losses. Rolling a 401(k) into a crypto-enabled IRA may be tax-free if done correctly, but mistakes can trigger taxes and penalties.

Q: What fiduciary duties apply to plan sponsors?
A: Plan sponsors must act prudently and solely in the interest of participants, carefully evaluating the risks and benefits of including cryptocurrency options.

Q: What operational hurdles do employers face?
A: Employers must address custody of digital assets, valuation complexities, and the volatility associated with crypto investments. For example, secure custody solutions for digital assets are still maturing, and there is greater risk of cyber-theft compared to traditional assets.

For more, see our rollover vs transfer pitfalls for HR and Finance.

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Ready to explore a modern, education-first 401(k) experience for your team? Get started with Basic Capital.

This content is for informational purposes only and is not legal, tax, investment, or compliance advice.

References

Department of Labor. (2025, May 28). EBSA Rescinds Compliance Assistance Release 2022-01. https://www.dol.gov/newsroom/releases/ebsa/ebsa20250528

Internal Revenue Service. (n.d.). Rollovers of Retirement Plan and IRA Distributions. https://www.irs.gov/retirement-plans/plan-participant-employee/rollovers-of-retirement-plan-and-ira-distributions

CNBC. (2022, November 4). Fidelity, ForUsAll Offering 401(k) Investors Access to Cryptocurrency. https://www.cnbc.com/2022/11/04/fidelity-forusall-offering-401k-investors-access-to-cryptocurrency.html

ForUsAll. (n.d.). Crypto in a 401(k): Benefits to Employers. https://www.forusall.com/401k-blog/crypto-in-a-401-k-benefits-to-employers

Time. (2022, May 5). Bitcoin in 401(k) Plans: What Retirement Savers Should Know. https://time.com/6173458/bitcoin-401k-reitrement