Senator Elizabeth Warren of Massachusetts, one of the most vocal advocates for consumer financial protections, has recently raised the alarm over the Trump administration’s push to allow cryptocurrency investments into ordinary workers’ retirement plans.
President Donald Trump signed an executive order in 2025 opening the door to so-called “alternative assets” to be part of retirement accounts such as 401(k) plans (1). However, the notorious volatility of these digital assets coupled with Trump’s own involvement in the crypto industry seems to have caught Senator Warren’s attention.
In a Jan. 12 letter to Securities and Exchange Commission (SEC) Chair Paul Atkins, she demanded a detailed account of how the agency intends to mitigate risks if digital assets such as Bitcoin are allowed into 401(k)s (2).
As of mid-February 2026, there’s no substantive public response from the SEC to her specific questions, despite a Jan. 27 deadline Warren set for a reply.
The SEC’s lack of a clear public response to Warren leaves a policy vacuum that could have real impacts on millions of Americans. Here’s how you can lose huge sums of money relatively quickly in an investment vehicle designed for reliable returns — not explosive volatility.
At its core, the 401(k) plan is designed for long-term retirement savings. Roughly 70 million American workers rely on these plans for their nest eggs, according to Fidelity (3).
In contrast, the extreme volatility of cryptocurrencies make them better suited to traders and speculators than retirement savers. Despite its comparisons to “digital gold,” the CME Group found that the price of Bitcoin moves up and down somewhat alongside the movements of the stock market, which means it is far more volatile than a reserve currency or hard asset (4).
Cryptocurrency has also underperformed stocks in recent years. As of Feb. 11, 2026, Bitcoin and Ethereum, the two leading cryptocurrencies, have underperformed the Nasdaq-100 and S&P 500 by wide margins over the last five years — and that’s not even including the dividends you earn from stocks. Put simply, you would have made more money by buying a simple and cheap index fund in 2021.
Unlike index funds, crypto funds are also expensive. Crypto-related exchange traded funds (ETFs) can have expense ratios as high as 2.67%, according to ETF Database (5).
In her letter to the SEC, Senator Warren highlights how this volatility and these high fees could lead to bad outcomes for many vulnerable savers.
“There is no reason to expect that inviting plans to offer these alternative investments will lead to better outcomes overall for participants,” she wrote.
Warren also raised concerns about Trump’s deep involvement in the crypto industry and how that could weigh on the administration’s ability to regulate these assets.
“President Trump’s sudden embrace of the crypto industry appears to be driven by his own conflicts of interest and ability to profit from crypto free-for-alls,” Warren wrote. “Since the beginning of his second term, President Trump and his family have amassed over $1.2 billion in financial gains from crypto.”
With these factors in mind, the letter requests the SEC to clarify how it would ensure fair valuation, prevent market manipulation and educate investors as crypto exposure expands through defined-contribution plans, but the agency is yet to respond even as Warren’s deadline has come and gone.
To sum up, cryptocurrencies are volatile, provide disappointing returns compared to tried-and-true alternatives like traditional index funds, and are operating in a lax regulatory environment that could heighten risks further.
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If you share some of Warren’s concerns about cryptocurrencies, the first step could be to reach out to your employer to get a clearer picture of your 401(k) choices. Speak to your manager, the finance team or human resources to see if they can give you more color about your retirement plan options.
Plan documents detail available investments, expense ratios, and administrative fees — information many workers overlook.
The next step could be to consult a professional financial advisor or planner to figure out if cryptocurrencies and other alternative assets match your risk appetite, long-term goals and investment style. If these niche assets are not a great fit, you can take steps to ringfence your investments.
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WhiteHouse.gov (1); U.S. Senate Committee on Banking, Housing, and Urban Affairs (2); Fidelity (3); CME Group (4); ETF Database (5)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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