Bitwise says banning Bitcoin from 401(k)s is ’ridiculous’ as Sen. Warren presses SEC on risks
Bitwise CIO Matt Hougan criticized efforts to block Bitcoin from 401(k) retirement plans as “ridiculous,” arguing Bitcoin’s volatility is comparable to or lower than some equities (he cited a 65% BTC swing Apr–Oct vs. Nvidia’s 120% swing). His comments follow a 2023 executive order by former President Trump directing the Labor Department to reassess restrictions on alternative assets in defined-contribution plans and a 2025 Department of Labor statement adopting a neutral stance on crypto in 401(k)s. Meanwhile, Senator Elizabeth Warren sent an open letter to SEC Chair Paul Atkins demanding answers on how the SEC will mitigate risks if retirement plans invest in crypto. Warren highlighted concerns about crypto volatility, higher fees, potential market manipulation, and the potential for large losses for retirement savers. She requested SEC responses by Jan. 27 on valuation, volatility treatment, market manipulation assessment, and plans for investor education. Bitwise expects slow institutional adoption but predicts crypto-in-401(k)s will eventually normalize. Key names: Matt Hougan (Bitwise CIO), Sen. Elizabeth Warren, SEC Chair Paul Atkins. Key keywords: Bitcoin, 401(k), SEC, volatility, retirement, Department of Labor, Matt Hougan, Elizabeth Warren.
Neutral
This development is neutral overall. Positive drivers: increased regulatory discussion, a neutral Department of Labor stance and Bitwise advocacy increase the probability of eventual institutional and retail access to Bitcoin via 401(k) plans — a structural demand catalyst that could support long-term price appreciation. Negative/driving caution: regulatory scrutiny from Senator Warren and the SEC’s requested assessments (valuation, volatility, manipulation, fees) create short-term uncertainty and could delay or restrict product rollouts. Historical parallels: prior regulatory scrutiny and guidance (e.g., pensions and ETFs) often produced heightened volatility around announcements but led to gradual adoption once frameworks were clarified (spot-BTC ETF approvals showed this pattern). For traders: expect short-term choppiness on headlines (Warren letters, SEC replies, labor/plan-provider statements). Medium-to-long-term, confirmation of permissive custody, valuation guidance, or major 401(k) providers adding crypto would be bullish for BTC demand. Conversely, any SEC restrictions, adverse guidance or major plan providers publicly banning crypto would be bearish. Trade implications: avoid large directional positions solely on this news; consider event-driven trades (news reaction spikes, implied volatility in options) and monitor regulatory timelines (SEC responses, DOL guidance, major plan-provider announcements).