Bitcoin, Ethereum rebound ahead of Trump’s executive order allowing crypto assets in 401(k)
- Bitcoin and Ethereum extend bullish momentum, ahead of President Trump’s executive order.
- The executive order aims to allow private equity, real estate, cryptocurrency and other alternative assets in 401(k) retirement accounts.
- The inclusion of crypto in 401(k) retirement accounts would affirm its legitimacy and acceptance as an institutional asset class.
Cryptocurrency prices edge higher on Thursday following a report from a White House official that United States (US) President Donald Trump is set to sign an executive order that will pave the way for the inclusion of alternative assets, including crypto, in 401(k) retirement accounts.
Bitcoin (BTC) reacted positively, extending its recovery from an intraday low of $114,259 to trade at around $116,400 at the time of writing. Ethereum (ETH) is following Bitcoin’s lead, breaching the $3,800 resistance, as the total crypto market capitalization recovers to $3.9 trillion.
Trump executive order could boost crypto legitimacy
President Trump is expected to sign an executive order on Thursday aimed at allowing cryptocurrency assets, private equity, real estate and other alternative assets in US 401(k) retirement accounts, according to a White House official, as reported by Reuters.
However, critics have faulted the move, saying that it would create instability in retirement accounts.
The inclusion of assets such as Bitcoin, Ethereum, Ripple (XRP), Solana (SOL), among others, would boost the institutional acceptance of the crypto industry, which has seen a lot of interest build up from publicly listed companies this year.
President Trump’s administration, since taking office in January, has worked to detangle the crypto industry from regulation by enforcement, ensuring stakeholders have room to innovate and grow within a healthy regulatory environment.
The Congress recently passed three crypto bills, including the GENIUS Act, signed into law by President Trump in July, the CLARITY Act and the Anti-CBDC Act, which head to the Senate for further deliberation.
One of President Trump’s campaign promises is to make the US a global crypto hub. The White House recently released a crypto report, with details on how the administration would foster innovation, development and ensure the clarity in regulations.
Bitcoin, altcoins, stablecoins FAQs
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
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