401(k) crypto rule nears finish line, with altcoins eyeing the door

The Labor Department's crypto-in-401(k) plan just took another step toward reality. The proposed rule landed at the White House Office of Information and Regulatory Affairs for final review on Thursday, according to the agency's own records — the last bureaucratic pit stop before it can be published and, eventually, take effect. The March proposal is designed to make it easier for retirement plans to offer alternative investments like crypto while handing employers and plan managers more legal cover when they do.

Here's the part altcoin fans will like: the rule names no coins and sets no minimum market cap. Instead, it tells plan managers to weigh six things when picking investments — performance, fees, liquidity, valuation, benchmarks and complexity. That silence is the opening. But it's not a guarantee of anything, and experts say the smaller stuff has a much harder road than Bitcoin and Ether.

Teresa Goody Guillén, managing partner at Bellementis PLLC, expects Bitcoin and Ether to get the first seats at the table, given their deep markets and existing investment products. The two are the biggest cryptocurrencies by market cap — roughly $1.5 trillion and $273 billion respectively, per CoinGecko data from Nov. 6. But she's not writing off the rest of the market. Managers just have to prove their picks are sensible. As she put it, the real question isn't which coins regulators anoint, but whether an investment clears the same bar of prudence, liquidity, valuation and investor protection as any other retirement option. Her take: big doesn't mean suitable, and small doesn't mean disqualified.

Bernardo Brites, co-founder and CEO of Trace Finance, is blunter. Run any token through that checklist, he said, and Bitcoin passes clearly while Ether scrapes by — everything else falls down on track record or benchmark long before market cap enters the conversation. For him the practical test is whether a plan committee can document a daily, reliable price from a regulated wrapper. If it can't, it's not going in.

The likeliest on-ramp isn't direct crypto at all. Guillén said ETFs and managed funds will probably arrive first because they slot into existing custody and recordkeeping systems, while holding coins outright drags in storage, cybersecurity and pricing headaches. Brites sketched a slow rollout: brokerage options first, then standalone ETFs and funds holding small crypto slices, with some options live in 2027, ETFs at bigger employers later that year, and broader availability by 2028.

Don't expect a sprint. Brites noted the White House review can run 90 days, followed by publication and a typical 60-day wait for an effective date — the rule changes the legal risk, not the plumbing, and the plumbing is slower. The safe harbor also isn't bulletproof: it doesn't stop lawsuits, and courts are handing agencies less deference these days, leaving its litigation weight unsettled. Add the reversal risk — 2022 guidance was undone in 2025 — and fiduciaries designing ten-year plans have plenty of reason to hesitate.