Labor Department Proposal Sets No Market-Cap Floor for 401(k) Crypto

The Labor Department’s proposal to allow cryptocurrencies in 401(k) plans sets no minimum market capitalization, leaving tokens of any size eligible for consideration as the measure awaits White House review.

The Labor Department submitted the proposal for final review on Thursday, Nov. 5. It does not name specific cryptocurrencies or set a minimum market-cap threshold.

Plan managers could weigh performance history, fees, liquidity, valuation, benchmarks and investment complexity. Bitcoin (BTC) and Ether (ETH) may be better positioned than smaller tokens because they have more established markets and investment products. Smaller tokens may face greater hurdles if they have limited histories, liquidity or reliable valuation benchmarks. The proposal does not establish these considerations as requirements.

Crypto exchange-traded funds and managed funds may reach plans before products holding tokens directly because they fit existing custody and account-management systems more closely. Some investment options could appear in 2027, with broader coverage around 2028.

The proposal still needs to complete White House review and further procedural steps. Retirement plan fiduciaries would retain their duties and potential litigation exposure.