According to André Dragosch, the European research director at cryptocurrency asset management firm Bitwise, the inclusion of cryptocurrencies in U.S. retirement plans could mark a milestone for Bitcoin adoption, unleashing billions of dollars in new capital and potentially driving the asset to surpass $200,000 by the end of 2025.
On August 7, President Donald Trump signed an executive order paving the way for cryptocurrencies to be included in U.S. 401(k) retirement plans, allowing Americans to access digital assets through their retirement plans.
Dragosch stated that the significance of including cryptocurrencies in 401(k) plans for Bitcoin (BTC) prices could be more substantial than the approval of a U.S. spot Bitcoin exchange-traded fund (ETF) in January 2024.
This "bullish" development could be "more important than the approval of the U.S. Bitcoin ETF itself," assuming a modest 1% portfolio allocation, which would bring an additional $122 billion in new capital, Dragosch told Cointelegraph during Monday's Chain Reaction daily X space program, providing a price prediction:
"If you look at the U.S. 401(k) and defined contribution retirement plans, they are massive," Dragosch said, adding that 1% is a "relatively conservative" allocation estimate for this $12.2 trillion industry.
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Incorporating digital assets into retirement plans would enable 401(k) portfolio managers to invest in Bitcoin ETFs, which could drive Bitcoin prices to new all-time highs, flashing another optimistic signal for Bitwise's $200,000 Bitcoin price target by the end of 2025.
Based on Bitwise's survey of financial advisors, most portfolio managers are more likely to recommend a 2.5% or 3% Bitcoin allocation for retirement plans, indicating that capital inflows will be more significant than the initial 1% allocation.
Dragosch noted that the first inflows of Bitcoin funds from retirement plan managers could arrive as early as this fall, coinciding with the Federal Reserve's anticipated first interest rate cut, which could propel Bitcoin to new highs:
According to the latest estimates from the CME Group's FedWatch tool, the market expects an 83% probability that the Fed will cut rates by 25 basis points at its next Federal Open Market Committee meeting on September 17.
In addition to improving monetary policy expectations, the economic incentives for 401(k) plan providers to offer exposure to Bitcoin ETFs could also accelerate Bitcoin adoption.
BlackRock, Fidelity, and Vanguard are the largest retirement plan providers in the U.S. While Vanguard has not yet "greenlit" crypto ETFs, "BlackRock and Fidelity have significant economic incentives to incorporate these Bitcoin ETFs into their standard plans," Dragosch said.
Dune data shows that BlackRock is the issuer of the largest Bitcoin ETF—iShares Bitcoin Trust, managing over $84 billion in assets, accounting for 57.5% of the total market share, while Fidelity's ETF is the second largest, holding $22.4 billion, accounting for 15.3% of the total market share.
On Friday, U.S. Securities and Exchange Commission (SEC) Chairman Paul Atkins confirmed that the regulator is working with the Trump administration to allow retail investors' retirement plans to invest in private equity, including crypto assets, but urged the establishment of necessary "appropriate safeguards" around alternative investments.
Related: Bitcoin (BTC) price movements have not fully reflected expectations ahead of Trump's announcement of a new Federal Reserve chairman.
Original article: “Bitwise: Inclusion of Cryptocurrency in U.S. 401(k) Retirement Plans Could Drive Bitcoin (BTC) to $200,000 This Year”
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