Bitcoin could reach a price of $200,000 by the end of 2025 if cryptocurrency inclusion in US retirement plans is successful. According to André Dragosch, head of European research at crypto asset manager Bitwise, this development could unlock billions of dollars in new capital and push the Bitcoin price above $200,000.
President Donald Trump signed an executive order on August 7, granting Americans access to digital assets through their retirement plans. This move may be more significant for Bitcoin’s price than the approval of US spot Bitcoin exchange-traded funds (ETFs) in January 2024.
According to Dragosch, including digital assets in retirement plans will enable portfolio managers to invest in Bitcoin ETFs, which could push Bitcoin’s price to new all-time highs. The inclusion of crypto in 401(k) plans may be even more significant than the approval of US spot Bitcoin ETFs, signaling another $122 billion worth of new capital.
Most portfolio managers are likely to recommend a 2.5% or 3% Bitcoin allocation for retirement plans, suggesting more significant inflows than the initial 1% allocation. The first Bitcoin inflows from retirement plan managers may come as soon as this fall, coinciding with the first expected interest-rate cut by the US Federal Reserve.
Markets are pricing in an 83% chance that the Fed will cut interest rates by 25 basis points during the next Federal Open Market Committee meeting on September 17. Bitcoin adoption may also be accelerated by the financial incentive of retirement plan providers to offer Bitcoin ETF exposure from major companies such as BlackRock and Fidelity.
The regulatory agency, the US Securities and Exchange Commission, is working with the Trump administration to enable retail investors’ access to private equity, including crypto assets. However, Chair Paul Atkins urged the necessity of “proper guardrails” around alternative investments.
Source: https://cointelegraph.com/news/401-k-crypto-retirement-plans-bitcoin-etf-analyst